Reflecting the growing anxiety over the complexity and inconsistency of various global regulatory frameworks, a group of financial heavyweights has joined forces in an attempt to streamline global regulation. Under the aegis of the Institute of International Finance (IIF), an industry association for global financial services firms, some of the worlds biggest banks, including JPMorgan, Deutsche Bank and UBS, are urging regulators worldwide to work together to institute a more efficient international regulatory process.
Based on discussions with financial firms and regulators, the IIF has set up the Special Committee for a Strategic Dialogue on Effective Regulation to design the framework. William Harrison, chairman of JPMorgan Chase and co-chair of the committee, says, Our work on application of the principles will stress three areas of particular importance: global coordination of regulatory policies, enforcement practices and anti-money laundering issues. He believes these are areas that can best be addressed through cooperation between financial firms and global regulators, rather than by regulators alone.
The group wants to ensure that regulatory decisions are based on active discussions between the two stakeholders. In addition, those discussions should focus on certain goalsnamely, looking at market-based solutions and prioritizing global coordination, stressing contingency planning for both the public and private sectors, and ensuring proportionate, effective enforcement of regulatory policies.
The IIF hopes to make regulation more effective by removing duplicative and counterproductive practices, particularly for international financial firms. Peter Wuffli, group chief executive officer of UBS and co-chair of the IIF committee, adds: This initiative will also complement other public-private sector discussions currently taking place and give momentum to steps to improve regulation that are already under way. In addition, our strategic dialogue initiative will complement the IIFs work on Basel II, liquidity management and accounting, and give us a framework to consider other areas where high-level review is in order.