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The Impact of Regulation in the ASEAN region, Carl fernandes slide presentation


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Carl Fernandes, Partner, Global Financial Regulation Group, Linklaters

Carl Fernandes has extensive experience in advising banks, broker-dealers, asset managers and private banks on a broad range of complex financial services regulatory issues in both Europe and Asia. Carl was head of the Asian Financial Regulation Group at Linklaters for five years before recently returning to London.

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The Impact of Regulation in the ASEAN region, Carl fernandes slide presentation

  1. 1. Asia House Signature ConferencePanel 1: The Impact of Regulation in the ASEAN regionCarl FernandesSeptember 2012
  2. 2. Introduction• My background and my perspective• Key forces at play in shaping the regulatory regimes in the financial sector: 1. Modernisation 2. Regional integration 3. Global conformity 4. Cleaning up: corruption 1
  3. 3. Forces at play - modernisation• Seeking to “upgrade” their financial services sectors by: • Liberalisation – promoting greater access to foreign firms and expanding financial inclusion domestically; • Further developing capital markets as a source of financing; • Encouraging consolidation amongst domestic firms to give them scale, and innovation so that they can deliver services more efficiently and effectively; • Having clearer rules, and fairness and objectivity in their application.• The key is to achieve this whilst maintaining regulatory focus on risk management and investor protection. 2
  4. 4. Forces at play – regional integration• Promoting “open” regionalism – contrast “fortress Europe”• The drive is to pool resources and give the region an international scale – reduce dependence on European and American markets• ASEAN Economic Community 2015 includes proposals to develop capital markets and promote the free provision of certain financial services within the region• ASEAN Banking Integration Framework (ABIF) 2020 • Flexibility – double track implementation – ASEAN 5 and the BCLMV Countries • Harmonisation of regulations • Building of regional financial stability infrastructure • Capacity building for BCLMV countries • Establishing set of criteria for ASEAN qualified banks to operate in any ASEAN country with a single “passport” 3
  5. 5. Forces at play – global conformity• Clear moral commitment to global reform program; key jurisdictions are on the FSB’s Regional Consultative Group for Asia• But not all reform proposals are appropriate for developing and emerging markets: > Capital and liquidity reforms > Contrast other prudential reforms around OTCD; shadow banking, GSIFIs 4
  6. 6. Forces at play – curbing corruption• The other initiatives will prove fruitless if corruption is not addressed• It’s not merely rules that are required, but active enforcement and cultural change• Measures include: • Regional collaboration • Establishment of independent commissions; • More transparency in government tender processes; • Whistleblower protection • Pressure from business consortiums and investors 5
  7. 7. Challenges going forward1. Not to repeat the mistakes of the west in relying on rules and markets to do the rest; innovation in the financial services sector serves a useful purpose up to a point2. Regulators having appropriately skilled staff3. Double Track Implementation of ABIF – bridging the gaps4. Continued fight against corruption 6