If you’re in the financial services sector, any GRC manager’s wish list includes regulatory clarity for 2010. In the depths of the financial crisis, the Obama administration promised financial services regulatory reform. President Obama himself remarked during his inaugural address: “But this crisis has reminded us that without a watchful eye, the market can spin out of control.” But what has happened since then?
A credit card bill was passed, but meaningful overhaul is still buried in the legislative process, and there are still major differences between the House and Senate versions of the critical elements of reg reform, including the systemic risk regulator, consumer protection and mortgage reform. Last week, Senator Dodd, who chairs the powerful Senate Committee on Banking, Housing and Urban affairs, announced that he wouldn’t be seeking reelection. Given the narrow margin in the Senate and his likely desire to get something done before he retires, we’re likely to see more compromise before anything gets passed.
Further, the political climate in Washington has shifted over the last year, and financial services reg reform is not the top priority for the administration–health care is (and now terrorism). In the end, as the political momentum behind reg reform fragments into competing alternatives, GRC managers are going to have to accept this uncertainty and the current regulatory structure, which may endure longer than expected. Of course, this in and of itself offers some clarity, which explains why we’re continuing to see strong growth in the GRC platform market, as companies move forward with their plans for integrated risk management, despite the uncertainty.
Tags: 2010 GRC Wish List