The Association for Financial Markets in Europe (AFME) and Capco have published a new report exploring the benefits of global operating approaches in capital markets and the implications of emerging EU and global policy, which risks driving localisation.
- Banks use global approaches to provide operations and technology services across the various locations and markets in which they operate, bringing efficiency, resilience, regulatory, service and cost benefits.
- However, policymakers in the EU and globally have an increasing focus on the impact of financial markets becoming more interconnected, covering third-party providers, outsourcing, intragroup arrangements, and operational resilience.
- This focus could result in requirements on banks to localise operations and technology services, ultimately impacting broader policy objectives by increasing funding costs for clients and investors and reducing investment in more resilient technologies and operations.
- Collaboration between banks and policymakers will be essential to consider any future policy impacts on global operating approaches. A risk and principles-based approach is needed to consider the implications of more interconnected financial markets against the efficiency and benefits of how todays banks operate.
The report can be accessed here.