The damage that a fraud investigation can wreak on a bank is already well documented, but what measures can banks take to protect themselves against such incidents and minimise the repercussions if a fraudster does slip through the net?
Nigeria’s banks may be suffering the impact of regulatory changes and monetary tightening, but the country’s robust growth and economic reforms are taking away the sting.
In response to restrictive regulation, trade finance securitisation deals are starting to materialise and, with these deals structured in such a way that they reduce risk weighting, lower leverage and increase liquidity, appetite for them is growing.
The regulation of the global financial sector should be extended to include intensive monitoring of merger and acquisition deals, which are a key source of instability.
Legal battles over MasterCard and Visa’s interchange fees have raged for years in various markets around the world, but now the European Commission is pushing ahead with legislation that will cap the level of the fees, which will have major repercussions for card-issuing banks and the payments market.
With investors claiming that Basel explanations of risk weighting models are indecipherable, confidence in these measures has been lost. If it is not restored, capital may have to be regulated using much harsher methods.
In Nigeria, ousted central bank governor Lamido Sanusi is under scrutiny. However, on an international level, it is the government that should be worrying about its reputation.
Lower growth in Latin America and a lack of reforms in areas such as education, infrastructure and taxation are not inviting propositions, but the region still shows some areas of great promise in 2014.
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