Regulations must monitor and not suffocate financial innovation

Published: 26/11/2019
Regulations must monitor and not suffocate financial innovation

Regulations should be fairer, more functional and more forward-looking, stressed Martina Drvar, the Vicegovernor of the Croatian National Bank, in her address at the 8th Annual EU Financial Regulation Conference, held on 7 November 2019 in Brussels.

It has to be acknowledged that the rules for overseeing bank operations have changed, that money is moving more quickly than ever before, while new technologies and new organisations are appearing and in some cases side-lining banks, said Drvar. In these conditions, banks are searching for new ways of making money and we should allow them to introduce financial innovation.

"I would like to see a system to monitor financial innovation and not suffocate it," stressed Drvar.

Regulations that govern bank operations are frequently directives that are transposed into national regulations, so, Drvar said, more functional regulation is needed that can be applied throughout Europe. When it comes to looking forward this includes digitalisation, which includes the entire process and not only putting paper into a digital form.

Today, banks are not competing in terms of financial services but in technological solutions, which is something that supervisors need to adapt to.

Vicegovernor Drvar also participated in the panel discussion Past experiences and future challenges – priorities for the new legislative term, where she lay special stress on anti-money laundering regulation. She said that proper procedures are key in such situations – knowing whom to contact when facing a money-laundering problem or a suspect person or company. This requires better interconnectedness in terms of clear regulation applied by all European banks.

The panel discussion that was moderated by Jack Schickler (MLex Market Insight), in addition to Vicegovernor Drvar, included Leena Mörttinen (Ministry of Finance, Finland), Thierry Philipponnat (Finance Watch) and Olivier Boutellis-Taft (Accountancy Europe).