In a pointed opinion article published in the Financial Times, Dan Davies, author of The Unaccountability Machine, notes that as supervisors warn firms to prepare for geopolitical risk, they face their own geopolitical pressures.
With the Basel III "endgame" stalled, the future of coherent, cross-border regulatory governance is increasingly uncertain, Davies observes. The EU has delayed the implementation of key provisions until 2026. The UK has pushed its timetable to 2027. In the US, there's not even a full proposal on the table, and comments from key regulators in the Trump administration have led to doubts as to whether one will be put forward at all.
Meanwhile, the bodies once driving regulatory innovation appear to be turning inward, Davies writes. The Financial Stability Board has said that it will undertake a review of its own processes in 2025. And the Basel Committee, in an effort to respond to the "banking turmoil" of Spring 2023, is not focused on developing new regulations but rather tools to support "effective supervisory judgment," he explains.
Davies notes that banking regulation has long been an anomaly in global governance — an area where central bankers sustained a decades-long project of harmonization through shared worldview and trust. If that spirit of collaboration is now giving way to fragmentation, firms may face not less oversight, but more: a return to localized rules, divergent expectations, and duplicative burdens across jurisdictions.
For more from Dan Davies, don't miss his contribution to our 2025 Compendium, coming this summer...!
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