How the COVID-19 pandemic has changed global banking’s vision for 2021 and beyond
A year ago, industry outlooks were blissfully ignorant of the pandemic. Twelve months later and it seems that the pandemic will continue to shape current events and have residual impact for some time to come. In 2021, will this external, seismic, global event cause governments and policymakers to overcome divergent tendencies and deliver more joined up solutions in the spirit of common cause, or will it reinforce recent trends of fragmentation and protection of regional and national interests?
The immediate prospects are not encouraging. In Europe, although a trade and cooperation agreement with the UK on the terms of its future cooperation with the European Union (EU) has been reached, the consequences for financial services remain a big unknown. In the US, due to the election and its aftermath, the new administration is clarifying its policy and supervisory priorities; and in Asia-Pacific (APAC), geopolitical tensions between China and the US show no signs of abating.
The financial services industry is considerably stronger than during the 2008 crisis, but the change management demands caused by the pandemic have tested risk management capabilities and regulatory responses. We look at the immediate environment (Now) and a little further ahead (Next and Beyond) to identify likely regulatory action. For a more detailed analysis of the future direction of travel, see EY’s paper on the impact of the COVID-19 pandemic on financial regulation.
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