View more on these topics

Cost of regulation set to double by 2010, says Deloitte

The cost of regulation for the world’s largest financial institutions could almost double to £50bn by 2010, according to Deloitte.

The top 100 firms have seen their regulation and compliance expenditure rise by more than 30 per cent in the past three years to an estimated £28bn in 2007, according to a study by Deloitte.

The business advisory firm warns that the prediction excludes any new regulation introduced in response to the current credit crisis.

In its report ‘In Control?’ Deloitte also highlights the fact that while larger institutions spend an average of four per cent of their total expense base on governance and compliance, smaller institutions spend six per cent.

Deloitte associate partner and head of research Chris Gentle says: “It appears growing regulatory demands could be creating an uneven regulatory environment which may act as a competitive disadvantage to smaller financial institutions.”

Deloitte head of financial services Russell Collins adds that governance, risk and control are some of the biggest issues facing financial institutions today.

He says: “As the bar of regulation and control continues to rise, senior executives must demonstrate to the relevant authorities and to investors that they are in control.”


Dodging torpedoes

Investment flows are undoubtedly polarised at the moment. Some investors are seeking high potential returns through emerging markets, specialist funds and singlecountry funds such as India and Russia. Others are seeking the safe haven of cash or more recently bonds. The latter, as I have mentioned before, look good value.

Simon Rogerson

Octopus Investments is one of the UK’s fastest-growing alternative investment specialists. The company’s revenue and customer base has more than doubled every year for the last five years and it now manages funds of over £500m.


News and expert analysis straight to your inbox

Sign up


    Leave a comment