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This presentation and the associated paper explore some ways in which different parts of the financial sector interact, and how this is influencing regulatary change agendas affecting each part. Particular emphasis is given to trends relating to systemic risk, and other longer term societal trends that span multiple parts of the financial community.

[as pdf]

Slides

1	Changing financial sector interconnectivities and their impact on regulatory frameworks
2	Changing Financial Sector Interconnectivities
3	Changing Financial Sector Interconnectivities
4	Malcolm Kemp
5	Aims of Workshop (1)
6	Aims of Workshop (2)
7	Initial working thesis of paper
8	Changing Financial Sector Interconnectivities
9	Similarities and differences between different sectors
10	Typical bank and insurer business models differ
11	They also have different funding bases (excluding equity) …
12	Different capital levels …
13	Different accounting bases …
14	Somewhat different looking Pillar 1 structures …
15	Basel III capital requirements
16	Solvency II SCR: Standard Formula
17	And different perspectives on Pillar 1 versus Pillar 2
18	However some business overlaps (and conglomerates!)
19	Basel III and Solvency II: Different histories and drivers
20	Basel III capital requirements
21	The fundamental importance attached to systemic risk
22	Human resource and other trends
23	Greater mixing and interconnectivities between sectors
24	However, DB (and perhaps also CDC) pension schemes?
25	Changing Financial Sector Interconnectivities
26	Importance to regulatory thought of systemic risk
27	Ascendancy in regulatory structures
28	On macro-prudential policy Haldane (2014) notes
29	Note association between systemic risk and non-banks
30	G-SIFIs
31	G-SIBs
32	G-SIIs
33	Consequence of decision to have some G-SIIs
34	NBNI G-SIFIs assessment principles, according to FSB (2014)
35	Implications for regulatory frameworks
36	Implications for risk modelling
37	BCBS (2012) view on ES
38	Subordination, tiering and tranching
39	Capital adequacy: a conceptual framework
40	Changing Financial Sector Interconnectivities
41	The technological and societal environment
42	Cyber risk coverage in e.g. RIMS Knowledge Base
43	Rationale for interest in cyber risk, e.g. Rudolph (2012)
44	How important is cyber to the financial services industry?
45	How ‘entrepreneurial’ do we want finance to be?
46	E.g. Gracie (2014)
47	IT software and hardware developments
48	How computationally ‘hard’ are risk management questions?
49	Broader network effects
50	Seeking ‘fairness’
51	Changing Financial Sector Interconnectivities
52	Other regulatory drivers and trends
53	Purpose of financial regulation
54	‘Prudential’ ideas proposed early in financial crisis
55	‘Conduct’ ideas proposed early in financial crisis
56	Other recent major EU-level directives and initiatives
57	EMIR
58	MiFID II and MiFIR
59	AIFMD and UCITS V
60	Shadow banking sector
61	FSB perspective, e.g. FSB (2013)
62	FSB policy work on shadow banking and systemic risk
63	Changing Financial Sector Interconnectivities
64	Initial working thesis of paper
65	Important Information

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