Regulatory Arbitrage Ultimately Costs Corporates

By Denise Bedell


regulatory-arbitrageOne of the big messages coming out of the Sibos conference in Osaka is the costs that arise when regulatory change is not consistent across jurisdictions. “We are still not on a level playing field,” noted Pascale Augé, director of Global Transaction Banking at Société Générale, in an interview with Global Finance at the Sibos conference in Osaka. And the costs associated with that uneven field are inevitably are passed on to corporates.


The impact of Basel III on trade was a key topic of discussion. As one delegate said: “We have grave concerns around local regulators’ interpretation of liquidity coverage ratios and minimum capital ratios.”

“Regulators need to ensure that [corporate] end-clients do not pay for it if there are difference in implementation,” said another delegate. “The industry is wrestling with how to have a consistent voice and get the right people engaged at a senior level.”

Meanwhile, until regulations take final form, corporates are dealing with price volatility as a result of regulatory and market uncertainty, with every new announcement out of Brussels or the US being priced into trade costs.