Regulation

As banks focus more on climate adaptation across their businesses, are they conceding that mitigation efforts are futile?

Stock market reform has not only revitalized the country's capital markets but has also permeated the real economy. Countries like Korea are quickly following suit. Interestingly, China also seems to be drawing inspiration.

In the wake of heavy losses and mis-selling to retail investors, there is an urgent need for an overhaul of risk management in the banking sector.

As Beijing works to underpin the equity market, China's fund houses and investment banks are betting on exchange-traded funds as the next big thing. That reflects a market corseted by regulation, where limited options compel a collective herd mentality.

The Sino-Swiss corridor, set up to encourage Chinese firms to sell global depositary receipts to international investors in the European state, took off fast in 2022. But a host of challenges, from Chinese regulatory concerns to an apparent lack of global interest, has stalled its progress.

While the world’s biggest markets are still preparing for T+1 settlement, talk is growing of the next step – but going any faster would mean a total reworking of how markets function.

It is not hard to find short-term worries over global markets’ state of readiness for the US’s transition to one-day settlement in late May. But even if the UK, Europe and those Asian markets still using two-day settlement can adapt to the shift in the longer term, they will also face intense pressure to lessen their dislocation from the US cycle by copying its move. Many also fear the ultimate end-game of same-day or even instant settlement.

It has become fashionable to describe private credit as an opaque and fast inflating bubble that could bring crisis to the global financial system. But in Asia even banks and regulators hope it will grow to bridge the yawning financing gap.

Restrictions may come at a cost as MSCI considers developed market status.