Global Banks Warn Against Fragmentation

Global banks are warning that the current wave of regulatory “simplification” and “deregulation” risks creating a splintered set of national rulebooks that raises costs and undermines transparency, as reported by Bloomberg.

The call is being coordinated through the Institute of International Finance (IIF). Tim Adams, CEO of the IIF, told Bloomberg that “fragmentation is no longer a tail risk — it’s a day-to-day reality,” and said the industry is pushing for modernization that “preserves resilience” without drifting into “increasingly splintered, overlapping regimes.” He argued that a “go at it alone” approach “raises costs, reduces transparency, and ultimately pushes activities into corners of the industry that regulators can’t see as clearly.”

The IIF has called for a global review of financial regulation and supervision, with standard setters playing a central role. A supporting IIF document urges policymakers to “recalibrate” rules where “the marginal financial stability benefit is no longer commensurate with the cost.” The IIF also proposes that supervisors address concerns of “supervisory overreach and overly broad supervisory work” in some jurisdictions.

“This isn’t an abstract policy debate for CEOs,” Adams said. “It’s a moment that’s central to banks’ ability to support the real economy while meeting high stability standards.”