Febrile market sentiment, mutual suspicion between regulators and the divergence between American and European financial systems blight the push for a global level playing field in the form of harmonized capital and liquidity standards under Basel III.

Companies are being forced to choose between investing in growth or honouring their commitment to their pension plans with increased allocations, to bridge a growing asset-liability mismatch.

As China transitions to a market-based consumption-led economy, financial reform seems inevitable and yet China’s big four government-backed lenders continue to dominate the landscape. More competition is needed to boost innovation in the formal banking system and lending to small and medium-sized enterprises.

Pent-up global demand, Chinese economic dominion and monetary reform have fed optimism that the renminbi is on the path to becoming a global trade and investment currency. However, although currency internationalization will boost China’s growth model in the medium-to-long term, the short-term political and economic costs are huge.

The days of tight ranges and low volatility in the cash FX market is over amid weakening inter-currency correlations. Country-specific themes are developing as the risk-on/risk-off trade recedes and foreign exchange re-emerges as an uncorrelated asset class.

The Basel Committee’s loosening of the regulatory noose around non-standard derivatives still leaves many issues unresolved, such as the definition of parties, according to the new margin proposal, harmonization of rules and the macro-prudential objective of the non-cleared market.

Volatility is low across nearly all major asset classes. But companies should not be complacent because it will return, warns David Simmonds, Head of Currency and Emerging Markets at RBS.

Algorithms are set to become the norm for FX execution among institutional investors such as pension funds and corporates, and the change may come quicker than many expect.

The BRICs are in danger of becoming the RICs. Brazil is losing ground to its major emerging market rivals Russia, India and China, and could slip further if it doesn’t get to grips with chronic under-investment, says Flavia Cattan-Naslausky, Director of Latin America FX Strategy at RBS.

Democrats and Republicans will probably fail to agree measures that would prevent a $1.2 trillion spending cut over the next decade, a senior Republican Party strategist has told RBS.