ENP Newswire -
Release date- 29052014 - Banks that manage regulation effectively (relative to their peers) delivered 170% higher shareholder return over the last 10 years than those who didn't, according to a study from
Despite this, many banks still see regulatory compliance as an unavoidable and unreasonable cost on their business.
PA analysed the shareholder value delivered by eleven of the largest banks operating in the
Whilst most banks have had substantive regulatory challenges in recent years, there are still major differences in how banks perform in their management of regulation; those who spend a lot of management time and energy resisting regulation deliver lower value.
As well as analysing the impact of regulation management on the shareholder value of banks, PA analysed the impact it had across the life sciences and energy sectors. All three sectors shared a common finding that companies that embrace regulation tend to perform better than those that don't.
'However, for many banks, understanding that compliance with the spirit and not just the letter of regulation will deliver shareholder value will require a fundamental shift in culture.' To achieve effective regulatory management and superior shareholder returns, banks must:
*embed regulatory management in the overall business strategy
*adopt a proactive and positive approach to regulation from the top of the organisation down
*minimise enforcement action by actively engaging regulators.
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