Increased Vigil- Hiring for compliance and legal staff in the banking sector increase
The recession of 2008 and 2009 was bad for the world economy and all the countries were more or less affected with the Europe and the US topping the list. However the global economy is slowly strengthening and the global GDP growth is estimated to rise to 3.5-4% in 2014. Post the financial crisis, the central banks had acted in a coordinated manner and had tried their best to provide a thrust to the ailing economies.
However now the time has come for the banks to make some money and recover the losses if any they had incurred during the financial crisis. Now the four major central banks—the Fed, Bank of England (BoE), ECB and the Bank of Japan—are likely to show policy divergences. The Fed and BoE are expected to slowly start raising interest rates, while the ECB and Bank of Japan are likely to continue easing.
Most of the global banks compete fiercely on league table rankings. There’s a new league table for banks—it is the rankings based on the fines and settlements paid and every bank wants to reduce that number. Banks are doing the maximum amount of hiring for compliance and legal. Since 2009, about 20 global banks have paid fines in excess of $100 billion to the US authorities. These fines have been for mis-selling, anti-money laundering violations, fraud and other compliance violations. The banks are desperate to reduce these malpractices.
JP Morgan, which has paid more than $25 billion in fines, has recently hired 13,000 new employees for regulatory compliance and is determined to reduce this amount of fine for the current fiscal. Globally, there is a huge regulatory upheaval due to increased vigil.
Source- The Financial Express
financial penetration, Fixing India's lack of financial penetration, India, offloading government stake in PSU banks to consolidating the insurance industry
