Banking Risk and Regulation

Regulators are in the crosshairs this week on a range of issues - from ignoring fast-growth units at banks to poor conduct and culture. We also dig into the supply-chain risk vulnerabilities exposed by the cyber attack on Santander and why the blurring of lines between TradFi and crypto is a 'good thing'. #bankingindustry #regulation #crypto #supplychainrisk

One member of the House of Lords told our correspondent she was "silly" for reporting this news. Fair comment? Let us know in the comments. Eight of the 13 members on the House of Lords’ Financial Services Regulation Committee, which probes how the sector is regulated, have strong ties to financial services firms. Experience and knowledge of how the City functions is vital. But Charles Randell, former chair of the Financial Conduct Authority, tells Banking Risk and Regulation's Ellesheva Kissin. “The large majority of its members in this last Parliament were on the payroll of financial services firms." Former non-executive director Mick McAteer says. “It is worrying that there’s such an imbalance in the whole decision-making process [of the committee].” Read more below 👇 https://lnkd.in/eAZqB3YK #financialservices #bankingindustry #banking

Regulators aren’t paying enough attention to risky, fast-growing units of banks, two former executives at Credit Suisse and Silicon Valley Bank have cautioned. “Strategy gets short shrift. I’m not sure regulators focus on it. I’m not sure that they necessarily have the confidence to,” said Mark Watson, who headed management governance at SVB. Speaking at the same webinar organised by Starling, Lara Warner, chief risk officer at Credit Suisse until 2021, echoed these concerns. Supervisors need to keep an eye firmly on banks going through “high growth, [or] high change” whose risk teams “can’t keep pace with strategy”, she said. Story by Ellesheva Kissin. Read more below. https://lnkd.in/ezxSc-y8 #riskandcompliance #banking #strategy

Oskar and Anders discuss the growing convergence of crypto and traditional finance in today's Financial Times' Banking Risk and Regulation section, pointing to the recent success of bitcoin ETFs as a leading indicator. They emphasize the need for regulators to embrace this new reality, predicting that the adoption of crypto services by traditional banks will only help to expand the long-term potential of the asset class.

"Openness will be key for the adoption of a #CBDC-based system. Too restrictive, and it will be bypassed. We have now learned that when given true economic freedom, people want to buy #CryptoKitties, #BoredApes, and dog-themed #MemeCoins." ...extract from an article me and Anders Kvamme Jensen I had published by Financial Times in Banking Risk and Regulation: https://lnkd.in/gFypFwyk #crypto #disruption

Partner Kit Spicer, CFA, PRM spoke with Banking Risk and Regulation about the renewed interest from US regulators in addressing interest rate and liquidity risk management practices at large financial institutions, and the importance of instituting strong governance practices to defend against complacency. Click below to view the article ⬇️ #riskmanagement #financialservices #Banking

A cyber security breach that exposed the data of Santander’s entire global workforce and millions of its customers has highlighted the growing threat banks face when using third-party software and hardware from technology vendors. A cybercrime gang breached one of Santander’s externally hosted databases, compromising the HR information of all its 200,000 staff and the private data of 30 million customers in Spain, Chile and Uruguay. The stolen data is up for sale on the dark web, with an asking price of $2mn. As cyber criminals exploit supply chains to hack into banks’ IT environments, pressure is mounting on cybersecurity and compliance teams to bolster their organisation’s cyber defences. Banks need to address the “root causes” of supply chain breaches, urge experts. But how can they do this in practice? Story by Nicholas Fearn. Read more here https://lnkd.in/eUr8zDsW #cybercrime #supplychain #bankingindustry

Thanks to legal and regulatory advancements, regular TradFi institutions will step in as crypto service providers, writes Oskar Åslund and Anders Kvamme Jensen of AKJ Group. Read more of their insights here👇 https://lnkd.in/euvSPrvz #TradFi #crypto #cryptoexchange

😇 Supervisors must “practice what they preach” and keep themselves to “similar if not higher standards” when they hold banks to account over culture and conduct, reports John Crowley. 😟 Dozens of leading central bankers and standard-setters have laid bare their concerns in a major industry report over rotten culture, accountability and a poor grasp of technology at their institutions. ✍ Experts’ fears are reflected in a series of damning interviews and articles for Starling’s 2024 Compendium in which some regulators come in for personal criticism. 🔥 It comes as supervisors have had their feet held to the fire over misconduct and poor governance. Earlier this year, the Federal Deposit Insurance Corporation (FDIC) Deposit Insurance Corporation — the US’s primary banking regulator — was accused of a longstanding toxic culture of "misogyny”, in which discrimination against female employees was commonplace. 😴 Supervisors have also been accused of being asleep on the job even before last year’s banking crisis. 👀 Insights from Starling Insight's CEO Stephen J. Scott, Wayne Byres, Andre Enria, Michelle Bowman, Gregory Baer, Charles Randell, Elizabeth McCaul and Neil Esho. Read more below. https://lnkd.in/evhVzYWA #regulator #bankingindustry #supervision #standardsetting

As Labour eyes a landslide victory in the upcoming UK election, can a change of government solve the UK’s illicit finance problem? Even the sitting Conservative government concedes that the stench of money-laundering hangs around the City. Up to 40 per cent of the world’s “dirty money,” according to a minister, still flows through London, UK overseas territories and dependencies. So what would a centre-left party — in a commanding position 20 per cent ahead in the polls, but 14 years out of power — do to tackle financial crime if it wins the general election handsomely next month? Despite efforts by successive governments to introduce tougher anti-money laundering controls, the amount of money “washed” through the UK each year may be as much as £88bn. The anti-corruption group Transparency International does not mince its words, describing the UK as a “laundromat for suspicious money”. Story by David Prosser and Barbara Pianese. Read more on what Labour's plans are👇 https://lnkd.in/evhVzYWA #AML #illicitfinance #AMLCFT #bankingindustry