| In the days running up to ‘Bretton Woods II’, the upcoming international summit tasked with overhauling the globe’s financial structure, the future direction of global regulation is at the forefront of discussions in the international business and legal communities. Few in these circles would argue with the reality that reform of the regulation of markets and indeed the regulatory bodies themselves is an inevitable necessity to ameliorate the impact of the current turmoil and prevent any possibility of a repeat performance of events leading to the crisis, but clear divisions remain on exactly how these changes should be delivered.
In a recent global survey conducted by Allen & Overy, the views of over 700 CEOs, chairmen, corporates, general counsel, partners and directors mainly across the financial services sector were canvassed for their opinions on the scope of issues they felt world leaders and governments should address, and which actions they felt could make matters worse. The results paint a telling picture of how key actors in the Asian financial markets feel the region should shape future regulations. In line with the global perspective established by the survey, broad acceptance was found throughout Asia for greater regulation of financial institutions, as well as strong feelings that domestic regulators should be restructured or consolidated. Asian respondents also agreed with their global counterparts on the need for tighter regulations over ratings agencies, as well as calls for greater transparency, global liquidity regulation and mark-to-market accounting. Unique to the Asian findings however, were the levels of support for more political oversight and regulation of bank lending practices. Public and political pressure has focused a critical eye on the bodies charged with protecting retail investors, and there are mounting cries in the East for a more aggressive approach to market regulation. The region also showed a slightly higher tendency to perceive the advantages of or need for global supervision and guidance. Whether the Asian voices within the G-20 (China, India, Indonesia, Japan and South Korea) will have sufficient sway to persuade their counterparts of the merits of their proposed courses of action remains to be seen. For now, it appears all markets are taking positive steps internally but adopting a ‘wait and see’ approach on the prospect of establishing an international regime to consolidate global efforts. |
