A new report suggests regulators across the globe are changing their focus, moving from an emphasis on 'aggressive enforcement' towards a more proactive approach designed to foster market stability, build operational resilience and protect vulnerable consumers.
- crypto conundrums: how, with the latest 'crypto winter' expected to continue through 2023, regulators around the world now have increasing political licence to intervene. It also suggests that regulators and financial institutions are more ready to engage with the potential of blockchain technology
- data deep-dive: as the move towards digital transformation has intensified, regulators have begun to staff data science teams, enabling them to better ingest and analyse a higher volume of data. The creation of these teams will also allow regulators to turn that information into actionable insights
- social sustainability: progress defining reporting metrics for climate-related factors had, to date, not been matched in relation to social impact. However, recent dynamic global social change is pushing social transition and social sustainability to the fore. As 2023 progresses, regulators are likely to take steps to drive more positive social outcomes
- energy transition: regulatory pressure is expected to increase, with the focus on climate change broadening out to a wider set of environmental issues
- fraud by fad: moves are afoot to ensure victims of investment fraud can pursue the institutions facilitating them, even if banks or financial institutions are unaware of the schemes using their systems.
Anderson concludes: "National and global regulators are carefully monitoring the impact of geopolitical tensions, energy shocks and high inflation, meaning that firms can expect to see more policy decisions aimed at building resilience. Co-ordination of these efforts is essential to tackling the current risks in global markets effectively. Yet whilst a collective approach is necessary to stave off those headwinds, evidence suggests a more protectionist approach is emerging as individual governments drive central banks and regulators to batten down the hatches and protect [or prioritise] their own economies."
The report can be downloaded here.