Equipping The Front Office For The New Risk Environment

The nature of regulation has changed: Regulation used to be something firms complied with or reported on, not what they had to contend with directly from a strategy and competition standpoint, which is what the industry is facing with the current onslaught of legislation. Survey respondents cite Basel III CVA, liquidity regulations, and Dodd-Frank derivatives reforms as regulations that will most impact trading desks in the coming years.

Not surprisingly, 38% of study participants expressed the perception of the aggressiveness of regulatory changes and related uncertainties as exerting the most pressure on trading operations, while 21% of respondents cited constraints on capital as the next important pressure area.