Nearly half (48%) of financial services executives believe that recent regulation has done little or nothing to improve stability in the financial services industry.
The poll of 300 professionals worldwide, commissioned by global professional services firm Kinetic Partners, shows that 47% of respondents – and 48% of C-suite executives – believe recent regulation has had little or no impact on financial stability. Furthermore, 11% state that regulation has actually made the financial services world less stable.
The survey, conducted for Kinetic Partners’ 2015 Global Regulatory Outlook report, also found that, six years on from the financial crisis of 2008, just 2% of senior executives surveyed, and 6% of respondents overall, say they believe changes to regulation have fully addressed the risk of another crash.
Half of C-suite respondents (50%) agree that the risk has been only partly addressed by new safeguards. This contrasts, however, with the number of senior managers saying regulations have promoted stability, which is 39%, up from 30% last year.
Commenting on the findings, Julian Korek, CEO and founding partner of Kinetic Partners, said: “More needs to be done to build stability in financial services and ensure the system is resilient in future. While attitudes to regulation have softened over the past two years, it appears that confidence is limited among financial services firms that the lessons of the crisis have really been learned. The major regulatory bodies have been very clear about future areas of focus and concern, but the fact that so many still think there is potential for another crash is worrying.”
The survey also revealed that, while a minority supported making senior management criminally responsible for deficiencies in compliance programmes, C-suite survey respondents were still more likely to say that criminal sanctions would have a longer-term negative impact on the industry (41%) or make no difference (17%).
Furthermore, fewer than one in 10 believes that more fines on firms (6%) or individuals (7%) would strengthen accountability and rebuild trust in the industry, and just 1% favoured new regulation. Instead, greater transparency in governance and management functions (25%), better use of existing regulations (26%) and improvements in public education about the financial world (36%) were held to be the keys to accomplishing this goal.