AMSTERDAM, 22-Jun-2016 — /EuropaWire/ — As central banks are trying to keep pace with the complexity of the rapidly evolving financial services market, they are scanning a new and uncertain landscape. In their new paperCentral banking 2020: Ahead of the curve, PwC’s Central Bank Group explores how central banks can keep up with the rapid transformation in societies, economies and communications and the systemic risks this generates.
Given the regulatory reform that is still sweeping through the banking sector, it is tempting to see regulation as the key determinant of the industry’s future shape. However, there are much more fundamental forces at work than regulation, ranging from the significant shifts in technology, change in public expectations, and the migration of ‘banking’ activities beyond the traditional banking sector.
In PwC’s view, it is these wider shifts that will ultimately dictate both how the banking sector as a whole will reform, and also what the role and shape of banking regulation will need to be. Building on this observation, PwC’s Central Bank Group has formulated three hypotheses and the implications for central banks.
Jeremy Foster, Central Bank Group Leader at PwC UK, says:
“It’s clear that central banks need new skills and systems to stay ahead of the curve. This means for instance that large investments will need to be made in predictive data analytics tools, to be able to identify where risks are building up in the financial system. A central bank that is maximising the possibilities presented by big data, including through the development of a data strategy and opening up its data to a wider audience to stimulate intellectual inquire and ideation, will be firmly on the front foot.”
Jeremy Foster adds:
“We believe central banks have an important role to play in facilitating the public debate over what society wants from the banking system. The result of this debate will also determine the central bank’s role in the management of the desired financial system and wider economy.”
Jeremy Foster:
“Central banks and regulators are understandably focused on making sure banks are not too big to fail. But the resulting regulations can at times appear siloed and fragmented. To mitigate this, regulators and central banks need to draw the regulatory strands back together and make regulation manageable for the firms they oversee.”
Notes to editor:
© 2016 PwC. All rights reserved.
Contacts
Joost Blankenspoor
Global Communications
Netherlands
joost.blankenspoor@nl.pwc.com
+31 (0)88 792 65 96
Lara De Vido
Senior Manager, Communications
United States
lara.de.vido@us.pwc.com
1 646 313 3635
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