The recent recession and inflation period has affected economies all over the globe with the international financial system remaining highly fragile during 2010.
In today’s era of integrative globalization, an impact on any economy has a direct and relevant effect on all economies.
It is this inter-connectivity between the components of the various economies that will compel them to work in synergy with each other in the coming times. International trade has further strengthened the dependency of individual economies on current financial stability for the global economics realm. However, economies are working towards recovering their position with rapid growth being evident, especially in the regions that have been targeted as emerging markets. Lets have a look at some of the key trends that are expected to have a long lasting impact on the global business scenario.
Transformation Holds the Key to Successful Recovery for The Global Banking Industry:
The prominent financial crisis that occurred recently may have caused a global uproar but in reality, most financial institutions from emerging markets managed to overcome it without much difficulty.
The impact of outcomes for regulators as well as global financial institutions has mutual patterns wherein the regulators have been known to lay more emphasis on the existence of systemic risks posed by major names in the global finance industry while the banks have concerns over their ability to manage the oncoming competition dynamics along with the possible impact of regulations made on returns.
Current statistics hold insufficient grounds for determining the final structure of the global framework for financial regulations. However, the changes that hold probability of occurrence include:
Corporate governance would experience heightened levels.
Consumer protection policies as well as initiatives would be strengthened.
Executive pay schemes are expected to be limited in keeping with current financial statistics.
Over the counter derivatives would witness greater regulations and increased transparency.
As is the general consideration that developed countries hold higher prospects of maintaining stability during economic recessions and financial crises, current statistics reveal that while financial institutions in the developed countries are striving for effective recovery, those in emerging markets are exhibiting better recovery results with most of the financial institutions overcoming the crisis with hardly any hiccups. However, in light of enhanced and revised regulatory frameworks, the cost of business would most likely hit a new high for most large financial institutions.
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