Euromoney Sibos Insider: Europe engages in excessive amounts of self-regulation

COPYING AND DISTRIBUTING ARE PROHIBITED WITHOUT PERMISSION OF THE PUBLISHER: CHUNT@EUROMONEY.COM

By:
Nathan Collins
Published on:

HSBC director feels that Europe is too strictly regulated in comparison with the rest of the world

Europe may be subjecting itself to too much regulation, according to Nadine Lagarmitte, head of financial institutions and government sector sales for Europe and Africa and payments and cash managements for Europe at HSBC. Speaking with Euromoney | Sibos Insider, Lagarmitte expressed concern regarding the challenge that the industry faced in dealing with liquidity problems and the issues introduced with the new regulations dealing with capital requirements in the US and, particularly, Europe. “I would not call Europe overregulated, but I would say that it is super-regulated. I find it bizarre that the US has not yet adopted Basle II, yet the EU is looking to adopt Basle III,” comments Lagarmitte. There has been concern that the regulations may have a damaging impact on the sector, hampering profitability and driving potential participants away. Much has been made of whether the profit-reducing potential of the new measures will outweigh the benefits that they purport to bring. “These regulations will make it a challenge to maintain profitability, they are adding cost to the industry and things are priced very thinly,” says Lagarmitte. There has been a great deal of querying over how the industry can adapt and maintain profitability in the face of these regulations, but Lagarmitte feels that it may be a better response to challenge the regulators rather than to change to conform to the regulations they have laid down. “The industry needs to challenge these regulations, strong leadership is required. Europe is too self-regulated,” notes Lagarmitte Lagarmitte feels that those involved in the industry may be taking too pessimistic an outlook, arguing that there are good signs for growth and that fears over liquidity are exaggerated – particularly in regards to some of the larger institutions: “We are looking at great global economy indicators, 3% GDP growth for the year. I don’t think liquidity is such a big issue, a lot of the larger institutions are very liquid. I’m optimistic, the industry needs more optimism.”  

Euromoney reports from the Sibos conference in Toronto all week. Visit www.euromoney.com/sibos  for all the latest news and interviews. During Sibos, you may sign up for email alerts from Sibos, including daily news and interviews with senior people in the market.