Powered by MOMENTUM MEDIA
subscribe to our newsletter
Deloitte flags 'seismic shift' in financial system

Deloitte flags 'seismic shift' in financial system

Deloitte lead partner Kevin Nixon has spoken out about significant changes to the global financial system and the impact on the business models of major banks.

Mr Nixon also pointed out the need for significant changes to bank conduct and culture globally.

Speaking at the AFR Banking & Wealth Summit in Sydney on Tuesday, Mr Nixon said that repeated scandals, fines, undertakings and enforcement actions on banks and financial institutions around the world has created an environment where, at the global level, there is a feeling that there needs to be a seismic shift in bank culture and conduct.

Advertisement
Advertisement

“The best way to perhaps summarise this feeling is Mark Carney, governor of Bank of England and chairman of the Financial Stability Board, who last year gave a speech where he was talking about conduct in the banking system. He said: ‘We can no longer talk about bad apples; we have to talk about the barrows themselves’.”

Global regulators, including those in Australia, will now focus on incentives, Mr Nixon said, adding that introducing new rules is ineffective.

“If you just build rules around culture and part of the culture is getting around rules – how far have you actually gone?”

Mr Nixon said regulators will be cracking down on the remuneration structure of financial services professionals; how much they get paid and what drives their decisions on a day-to-day basis.

“What are the performance incentives? This is all subject to a review at present and there will be guidelines coming out on this,” he said.

Mr Nixon warned that there are “intended consequences” that are taking place on a global regulatory level that will see fewer bank activities in the future.

“Nobody should be in any doubt that for regulators around the world some of the intended consequences include lower returns on equity; less activities in banking systems and financial markets; a higher cost of doing activities – these are all intended consequences, and banks around the world are responding to it,” he said.

Deloitte flags 'seismic shift' in financial system
mortgagebusiness

 

Latest News

The embattled wealth giant has confirmed that its statutory net profit fell by $820 million in 2018, due to costs associated with the royal ...

The non-major bank’s net profit after tax has dropped by 4.7 per cent, coinciding with weaker home lending performance. ...

Regulatory sandboxes may not be the answer for regulating cross-border fintechs, a new report has suggested. ...

FROM THE WEB

POST RC PANEL DISCUSSION ADDED

podcast

LATEST PODCAST: The aftermath of the final royal commission report

Is enough being done to ensure responsible lending?