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Heavy-handed Regulation Hurts Our Global Clients, Say Top Bankers

Brian Moynihan, chief executive of Bank of America, and Bill Winters, who holds the same role at Standard Chartered, appeared to question the regulatory tightening that has been put in place since the crisis.

Published: 22nd January 2016 08:21 AM  |   Last Updated: 22nd January 2016 08:21 AM   |  A+A-

The heads of two of the world's biggest banks have criticised regulators for making it harder and more expensive to look after increasingly global clients in the wake of the financial crisis.

Brian Moynihan, chief executive of Bank of America, and Bill Winters, who holds the same role at Standard Chartered, appeared to question the regulatory tightening that has been put in place since the crisis.

Speaking at the World Economic Forum, the two veteran bankers both agreed that clients demand increasingly global services to meet their needs around the world, which creates challenges for banks.

Mr Moynihan said that there was a "disconnect between the absolute globalisation of companies and the ring-fencing of countries on a regulatory basis".

He pointed to the post-crisis country-by-country regulation, which he said can be a hindrance.

"All that stuff is de-globalising while customers want us to work for them on a global basis," Mr Moynihan said, adding that those customers ranged from individuals to the largest of companies.

Mr Winters, who took over the running of emerging markets-focused Standard Chartered last June, said of regulatory fragmentation: "It's real and it's expensive.

"It doesn't stop the global financial system, it just makes it more expensive."

The two men made the comments during a WEF session on the future of global finance.

Both men agreed that there should be a level playing field for companies involved in making payments, to respond to the rise of new financial technology companies involved in mobile and other payments.

"To the extent that large chunks of the population are using their Sim cards as their value store, someone should be watching them," said Mr Winters.

He directly name-checked Vodafone as an example of a company that operated in countries such as Kenya and which was not regulated in the same way as banks.

"The payment system has to be regulated and participants need to be observed," he continued. "FinTech has a role to play but where the issue is systemic it needs to be dealt with the same way."

Mr Moynihan agreed, saying that financial technology companies should be held up to the same standards as regulated banks on matters such as cyber security.

 "If you had a disruption [to the payments system] of any size, you'd have an effect," he said.

Steve Schwarzman, head of private equity giant Blackstone, and also on the panel, said that regulation had made the world less safe in some aspects.

"By forcing banks out of the dealer market, there's no one to make markets in fixed income. There's no one to be in the middle," he said.

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