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Global corporations & network banks need to work together to influence regulators

The importance of the global network of transaction banking in providing corporations with the ability to move funds, enable trade and facilitate securities clearing and settlement around the globe has become evident as companies start to expand beyond their national borders.

At the same time, the global regulatory reform agenda continues to unravel and risks to this global network could unintentionally emerge.

New book

Ruth Wandhöfer's new book explores how regulatory change is potentially influencing transaction banking services. What is happening in terms of the different regulatory developments and how to reduce potential unintended consequences of the current regulatory environment on both providers and users of transaction banking?

Wandhöfer notes that on the one hand, regulations are looking to enhance local control, whilst at the same time could risk to impinging the global network provided by transaction banking. The perceived risk of inter-connectedness and geographical footprint contrasts with the need to be in control of the network and have viable plans to keep essential transaction banking services running even in times of resolution. 

Wandhöfer has been studying the impact of the new regulations such as Basel III on the efficiencies and risk the transaction banking business. Her new book entitled ‘Transaction Banking and the Impact of Regulatory Change - Basel III and other challenges for the global economy’ was published on the 24th of October.

In the book, Ruth Wandhöfer presents an insider's guide to the impact of regulation on the transaction banking business, exploring regulatory reform and the role of transaction banking. It provides a deep dive into Basel I – III that enables the reader to understand how these rules impact a bank's balance sheet, followed by a critical analysis of European and US payments regulation. It covers areas such as prudential rules; liquidity/capital; specific product related legislations for payment services; trade finance; potential impacts on competition; and what it means for the end user. 

Practical suggestions

Ruth also shares practical suggestions to reduce the unintended consequences of these measures on transaction banking and proposes an alternative regulatory model for prudential regulation. (Further review of these proposals later.)

Even the ECB likes Ruth’s book

Vítor Constâncio, Vice President European Central Bank, wrote, ’This book brings to light the challenges of international regulation and clarifies the role of transaction services in supporting the world economy. It is an essential navigation tool to understand unintended consequences of regulations on this vital business, where rectifying measures should be applied.

Copies of Ruth’s easy read (312 pages) are available for £60 from palgravemacmillan, see.

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Control & Compliance in Operations