A string of scandals in global financial services has caused a “massive loss of trust” and the industry must take ownership of the issue, says NAB executive Drew Bradford.
Speaking on a panel at the ASIC Annual Forum in Sydney yesterday, Mr Bradford – who is the executive general manager of fixed income, currencies and commodities at NAB – said the industry must work with regulators to restore integrity to wholesale market.
The assessment of the panel was that confidence has eroded as a result of the global financial crisis and global scandals such as LIBOR and forex manipulation, is increasingly difficult to regain and this is continuing to impinge on the industry’s image.
Mr Bradford argued that the industry must take some ownership for the “massive loss of trust.”
“We have to work closely with regulators so we get ourselves into the right place, the industry itself can’t do it on its own,” he said.
Mr Bradford also noted that it is crucial for companies, including NAB, to set an example from the top in order to effectively improve industry culture and therefore rebuild trust.
“The loss of trust is not only impacting markets but its impacting our clients,” he said.
Mr Bradford concluded that it is not a time for the industry to be “looking out the window” but “a time for looking in the mirror”.
“The industry itself has to lift its game; otherwise we give regulators little choice but to intervene,” he added.
UK Financial Conduct Authority head of infrastructure and trading firms Alison Barker argued that regulators must look at regulation as a comprehensive issue due to the global nature of markets and their reach into the real economy.
“What is the role of global versus local regulation and how far should regulators extend?” Ms Barker asked.
“The question is … in these huge and complex, fast-moving markets, what is the role of industry to help? And whose responsibility is it to actually define what’s good and bad on a day-to-day basis?”
Ms Barker said regulators and industry have a collective responsibility to improve integrity and trust within the sector.
She added that benchmarks need to be strengthened and transparency improved.