It may seem that those in Financial Services within the UK are starting to breathe a sigh of relief. The UK recession is technically over, the bonuses have, for many, started to bounce back to their pre-credit crunch proportions and the financial markets, for the main, appear to have settled back to typical levels.
But is that it? Is the credit crunch over? Are the banks (apart from those that we own!) back to normal and all financially sound again?
When asked recently whether the credit crunch was over, a senior financial guru said that although the credit crunch, the drying up of interbank lending market, was now over, the aftermath of those events would be with us for many years to come.
To understand how the current government, financial services regulator, European Commission and wider world are trying to clean up that aftermath and whether their approach would sort out the mess left behind, BDO has sponsored the Centre for European Reform in its new publication “How to Restore Financial Stability”, by Philip Whyte.
This publication considers the causes of the recent financial crisis and looks at what is currently being done to “resolve” it. It critiques whether the steps being taken, the volumes of regulatory change that is being seen both in the UK and in Europe, will restore overall financial stability, or whether they are there simply to show that changes are being made, steps are being taken and that the “bad guys”, the senior management and well paid executives of large banks and other significant financial institutions, are having their lives made slightly more difficult by increased legislation and paperwork.
We have already seen that some solutions being proposed by government and the regulators seem to stem from previously held agendas which do not obviously solve any of the problems and could in fact make matters worse. This publication provides useful material to assist with the development of rationally based (rather than opportunistic) solutions which by addressing the real issues will give the best hope for success.
The Centre for European Reform's publication, "How to Restore Financial Stability" can be found at http://www.cer.org.uk/pdf/p_943.pdf
BDO welcomes your comments on the measures being taken to “restore financial stability” and invites you to join the online discussion at www.freedomtothink.biz.
If you would like to discuss the specific implications of the continued change in regulatory environment on your business, do not hesitate to contact Peter Chidgey, Head of Financial Services or your local BDO advisor.