Global Survey 2017

Global Survey 2017 Regulatory and Market Developments Banking - Securities - Insurance Covering 21 Countries and the EU October 2017 Institute of International Bankers Global Survey 2017 OVERVIEW The Institute of International Bankers represents internationally headquartered banking/financial institutions from over 35 countries in connection with U.S. legislative, regulatory, compliance and tax issues that affect their banking, securities, insurance and other financial activities in the United States. In the aggregate, IIB members’ U.S. operations hold approximately $5 trillion in banking and non-banking assets, fund 27% of all commercial and industrial bank loans made in the U.S. and contribute to the depth and liquidity of U.S. financial markets. IIB members also contribute more than $50 billion each year to the economies of major cities across the country in the form of employee compensation, tax payments to local, state and federal authorities, and other operating and capital expenditures. This 30th annual Global Survey of Regulatory and Market Developments in Banking, Securities and Insurance is part of the IIB’s ongoing efforts to contribute to the understanding of global trends in financial regulation and markets. This year’s Global Survey covers developments during the period from July 1, 2016 to June 30, 2017 in 21 countries and the European Union (EU). We are very grateful to the banking associations and financial services supervisory authorities from those countries and the EU that have contributed to this year’s Survey and without whose participation this publication would not be possible. This year’s Survey includes discussion of remaining implementation of regulatory reforms by various countries in regard to increased capital and liquidity safeguards, over-the-counter derivatives, resolution authority and risk restraints similar to the proprietary trading restrictions contained in the U.S. “Volcker Rule”, as well as anti-money laundering efforts and how government authorities around the world are addressing cybersecurity threats to financial institutions operating in their jurisdictions. In describing the diversity of initiatives undertaken in these areas by countries around the world, the Global Survey provides a useful point of reference for assessing these developments and their impact on the international financial community. For further information contact: Institute of International Bankers 299 Park Avenue New York, New York 10171 Tel: (212) 421-1611 E-Mail: [email protected] 2 Institute of International Bankers Global Survey 2017 TABLE OF CONTENTS AUSTRALIA……………………………………………………………………………….…...5 Prepared with the cooperation of the AUSTRALIAN BANKERS’ ASSOCIATION CANADA………………………………………………………………………………..….…...7 Prepared with the cooperation of the CANADIAN BANKERS ASSOCIATION CHINA………………………………………………………………………………………..…14 Prepared with the cooperation of the BANK OF CHINA EUROPEAN UNION…………………………………………………………………………...17 Prepared with the cooperation of the FEDERATION BANCAIRE DE L'UNION EUROPÉENNE FRANCE…………………………………………………………………………………….….31 Prepared with the cooperation of the FÉDÉRATION BANCAIRE FRANÇAISE GERMANY…………………………………………………………………………………….37 Prepared with the cooperation of the ASSOCIATION OF GERMAN BANKS HONG KONG….………………………………………………………………………………41 Prepared with the cooperation of the HONG KONG ASSOCIATION OF BANKS INDIA….…………………………………………………………………………………….…47 Prepared with the cooperation of the INDIAN BANKS’ ASSOCIATION ITALY……………………………………………………………………………………….…55 Prepared with the cooperation of the ASSOCIAZIONE BANCARIA ITALIANA JAPAN…………………………………………………………………………………………60 Prepared with the cooperation of the JAPANESE BANKERS ASSOCIATION LATVIA…………………………………………………………………………………….....61 Prepared with the cooperation of the FINANCIAL AND CAPITAL MARKET COMMISSION OF LATVIA 3 Institute of International Bankers Global Survey 2017 NETHERLANDS……………………………………………………………………………..65 Prepared with the cooperation of the DUTCH BANKING ASSOCIATION NORWAY…………………………………………………………………………………....70 Prepared with the cooperation of the FINANCE NORWAY PORTUGAL…………………………………………………………………………………..74 Prepared with the cooperation of the PORTUGUESE BANKING ASSOCIATION ROMANIA…………………………………………………………………………………....78 Prepared with the cooperation of the NATIONAL BANK OF ROMANIA SINGAPORE……………………………………………………………………………….…81 Prepared with the cooperation of the ASSOCIATION OF BANKS IN SINGAPORE SOUTH AFRICA………………………………………………………………………….….88 Prepared with the cooperation of the THE BANKING ASSOCIATION SOUTH AFRICA SPAIN………………………………………………………………………………………..94 Prepared with the cooperation of the SPANISH BANKING ASSOCIATION SWEDEN…………………………………………………………………………………….96 Prepared with the cooperation of the SWEDISH BANKERS' ASSOCIATION TURKEY……………………………………………………………………………………..99 Prepared with the cooperation of the BANKS ASSOCIATION OF TURKEY UNITED KINGDOM………………………………………………………………………...105 Prepared with the cooperation of the UK FINANCE UNITED STATES…………………………………………………………………………....112 4 Institute of International Bankers Global Survey 2017 AUSTRALIA Banking reform has been central to the Australian Government’s political agenda in 2017 with Australia’s banks facing an unprecedented level of reform from federal and state governments and regulators. The federal conservative Coalition Government, which only holds a one seat majority in the lower house, has been under increasing political pressure from the Labor Opposition, which has garnered electoral support following its 2016 calls for a Royal Commission to Australia Banks. The Opposition’s rising support in the polls means pressure on banks is likely to remain until Australia’s federal election, which is due to be held by 2019 should the Government serve a full three-year term. Banks have continued to perform well recording strong albeit slightly weaker profitability and paying strong dividends to the predominantly Australian shareholders, who hold around 80 per cent on average of Australia’s four major retail banks. The strong performance of Australia banks has been against a backdrop of solid economic performance. The most recent national growth figures for the June quarter 2017 showed Australia’s economy grew by an annual 1.8 per cent in inflation-adjusted terms. Business investment and exports have improved after years of weakness owing to the commodity cycle downturn, but Australian households continue to be under pressure by rising debt levels and weakness in wage growth. Federal Budget Banking Package The annual Federal Budget, handed down in May 2017, contained major banking announcements, most notably being a new liabilities tax on Australia’s five largest banks, which is expected to raise $6.4 billion over the Budget’s four years of estimates. The Budget also included a Banking Executive Accountability Regime modelled on a similar UK scheme, as well as three new regulator banking inquiries and reforms to credit cards and dispute resolution. Bank Levy The federal government introduced a major bank levy on Australia’s five largest banks beginning from July 1 2017. The levy is calculated quarterly as 0.015 per cent (annualised 0.06 per cent) of an ADI’s licensed entity liabilities reported to the prudential regulator APRA quarterly. Liabilities subject to the levy are: corporate bonds commercial paper certificates of deposit, and Tier 2 capital instruments. The levy will not apply to the following liabilities: additional Tier 1 capital, and 5 Institute of International Bankers Global Survey 2017 deposits of individuals, businesses and other entities protected by the Financial Claims Schemes, that is less than $250,000. The levy will raise $6.2 billion over the four years of Government projections. Linked to this is a year-long ACCC inquiry on residential mortgage pricing inquiry until 30 June 2018. ACCC will be able to require relevant bank to explain changes or proposed changes to residential mortgage pricing, including changes to fees, charges, or interest rates by those banks. The Australian Bankers Association strongly opposed the measure noting that it was introduced with no former consultation and a very truncated period for feedback. The ABA voiced concerns about the levy on the following grounds: The imposition of a new tax on selected banks, with no sunset clause, leaves open the possibility that its base will be broadened and the rate lifted by future governments, thereby increasing the impact and possibly extending to other banks. The assertion that a new tax can be “absorbed” is erroneous, it will have to be borne by savers, borrowers, shareholders, employees, suppliers or a combination of all, and the public is entitled to know this. The imposition of a new tax on five companies that are profitable sets a worrying precedent for other successful Australian businesses. In its own Budget, the state of South Australia its own version of the bank levy which came on top of the federal tax but was weighted to the size of the South Australian economy. This tax is currently before a vote in the South Australian Parliament and faces a High Court challenge if passed given legal views that states in Australia’s federation do not have the constitutional right to levy these sorts of taxes. Banking Executive Accountability Regime (BEAR) The Government has sought to draw on elements of a similar system of accountability that is already in play in the United Kingdom in introducing its BEAR regime. The regime included three main components: Senior mangers’ regime Senior executives and directors will need

Load more