A new report by the International Regulatory Strategy Group (IRSG), launched today (Thursday 18th March), calls on global stakeholders to reaffirm their commitment to regulatory coherence to support a digital and green pandemic economic recovery.
Global Solutions to Global Problems: Promoting Regulatory Coherence in Financial Services for Pandemic Recovery suggests that by making a renewed commitment to regulatory coherence, policymakers will support progress on challenges to future economic growth, such as climate change, cyber-crime and financial crime.
Data referenced in the report suggests that regulatory fragmentation in the financial services sector consumes 5-10% of annual global turnover.*
Three practical steps for policymakers are recommended to promote regulatory coherence:
- Foster operational resilience: A call on global regulators and standard setters, in co-operation with national stakeholders, to play a leading role in global economic recovery by developing guidance and a set of standards to foster operational resilience of global supply chains within the financial services industry in the post-pandemic environment.
- Encourage innovation in digital governance: Create, shape and influence the global digital regulatory framework by fostering regulatory and standard-setting collaboration and information-sharing in critical emerging areas, including cyber security, data privacy, cross-border data transfers, fintech and regtech, in order to avoid regulatory fragmentation, promote an open and level-playing field, and mitigate emerging digital security risks and vulnerabilities.
- Incentivise sustainable finance: Encourage the development of a better financial services framework for incentivising green finance, financial inclusion and sustainable finance objectives, including where appropriate common standards on disclosure, to prevent green washing, and enhance ESG data and ratings.
City of London Corporation Policy Chair, Catherine McGuinness said:
This timely report highlights how global regulatory coherence will be vital to our attempt to build back better.
“The common challenges we face across the globe call for a common approach as we rebuild after the pandemic and combat climate change. Fragmentation however ultimately leads to increased costs for customers and reduced choice. Instead we need cross-border regulatory collaboration in order to support a digital and sustainable economic recovery.
“Global policymakers should adhere to the principles set out in this report as an essential means of unlocking future growth.”