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Growth under threat from new Basel III, EMIR, Dodd-Frank regs 

January 23, 2014
Elliott Holley, Banking Technology

Regulation is driving a structural shift away from capital markets and investment banking towards transaction banking – but even this hint of opportunity could be under threat, according to senior financial services panellists speaking at the BAFT IFSA conference in London this week.

“Whilst the outlook for wholesale banking remains somewhat challenged, we see a positive view for transaction banking, and an opportunity for it to play a central role in evolution of transaction banking and corporate banking,” said Matthew Austen, partner and EMEA head of corporate and institutional banking at Oliver Wyman. “The balance is shifting. Transaction banking should be a real engine of growth, as it is now bigger than capital markets.”

However, Austen added that Basel III is increasing the cost of capital for global financial institutions, leading to significant withdrawal of capacity that could hinder major global banks by tying up resources that could otherwise be invested into opportunities in transaction banking.

Read more: Banking Technology

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