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Finance

Finance

Last week, the European Commission announced a new package of regulatory measures: An in-depth regulatory overhaul at all levels -  capital, capital adequacy, leverage ratio and loss-absorbing capacity -  aimed at “completing the post-crisis regulatory agenda by making sure that the regulatory framework addresses any outstanding challenges to financial stability, while ensuring that banks can continue to support the real economy.”

The banking business is reinventing itself. The impact of fintech companies, technological maturity, and customers who are used to digital experiences, all mark a transformation that the financial industry is facing in the certain knowledge that innovation and collaboration with new players will play an important role in the future. But what are the most difficult barriers to overcome in this process? For BBVA Research, Santander, Banorte and Tecnocom, all present in the panel on The digitization of commercial banking at the Latibex Forum, the response is clear: the challenges are regulation and the change in corporate culture.

size

The fall of Lehman Brothers made it clear that the size of a bank can be important. Its collapse demonstrated the impact that an institution’s bankruptcy could have on the whole financial system and its repercussions for a country’s entire real economy. As a result, the G20 authorities sought to protect financial stability. Their first step was to identify other systemic banks.

Political events have been to the fore in 2016, and discussions at yesterday’s "Challenges for the Future of Banking"  (CFB) event, hosted by the IESE Navarra Business School in London*, reflected this. Commenting on the rumored bonfire of U.S. banking regulations by the incoming Trump administration, one speaker said: “I don’t want the Volcker Act (which prohibits American banks from trading on their own behalf) repealed - the re-organization would be too disruptive.”