Purpose – The purpose of this paper is to find out how effectively implemented are measuring approaches to compliance and whether there is a correlation between the measures implementation, financial specialisation and international activity. The authors evaluate if the regulatory framework implies a measure cost asymmetry, depending both on the proportionality principle and on the existence of different supervisors with an heterogeneous set of enforcement rules. Design/methodology/approach – The analysis is based on a survey involving 84 financial firms (banks, investment companies and insurance companies). Two criteria have been used to interpret the results: the prevailing workability within international and domestic intermediaries; the intermediary typology, creating a distinction between banks other financial intermediaries (FIs) and insurance companies. Findings – Italian financial firms are sensitive to minimise sanctions, but the reputational impact is becoming more important. International firms are more sophisticated than domestic ones for their ability to measure both the probability of non-compliance events and their severity. Banks show the highest attitude to adopt insurance or financial contracts to minimise the negative impact of non-compliant behaviours. Small FIs are late in measuring the exposure and losses due to non-compliance actions. Originality/value – Four years after the Basel Document on compliance, a large percentage of firms is still managing the process within a function with different purposes; nevertheless, reputational impact has become more important. Small intermediaries show a lower attitude to implement a risk management approach, with a capital management sensitivity. This finding addresses the question about the existence of size effect which could reduce the compliance attitude.

Gabbi, G., P., M.T., L., N. (2011). Firm Size and Compliance Costs Asymmetries in the Investment Services. JOURNAL OF FINANCIAL REGULATION AND COMPLIANCE, 19(1), 58-74 [10.1108/13581981111106176].

Firm Size and Compliance Costs Asymmetries in the Investment Services

GABBI, GIAMPAOLO;
2011-01-01

Abstract

Purpose – The purpose of this paper is to find out how effectively implemented are measuring approaches to compliance and whether there is a correlation between the measures implementation, financial specialisation and international activity. The authors evaluate if the regulatory framework implies a measure cost asymmetry, depending both on the proportionality principle and on the existence of different supervisors with an heterogeneous set of enforcement rules. Design/methodology/approach – The analysis is based on a survey involving 84 financial firms (banks, investment companies and insurance companies). Two criteria have been used to interpret the results: the prevailing workability within international and domestic intermediaries; the intermediary typology, creating a distinction between banks other financial intermediaries (FIs) and insurance companies. Findings – Italian financial firms are sensitive to minimise sanctions, but the reputational impact is becoming more important. International firms are more sophisticated than domestic ones for their ability to measure both the probability of non-compliance events and their severity. Banks show the highest attitude to adopt insurance or financial contracts to minimise the negative impact of non-compliant behaviours. Small FIs are late in measuring the exposure and losses due to non-compliance actions. Originality/value – Four years after the Basel Document on compliance, a large percentage of firms is still managing the process within a function with different purposes; nevertheless, reputational impact has become more important. Small intermediaries show a lower attitude to implement a risk management approach, with a capital management sensitivity. This finding addresses the question about the existence of size effect which could reduce the compliance attitude.
2011
Gabbi, G., P., M.T., L., N. (2011). Firm Size and Compliance Costs Asymmetries in the Investment Services. JOURNAL OF FINANCIAL REGULATION AND COMPLIANCE, 19(1), 58-74 [10.1108/13581981111106176].
File in questo prodotto:
File Dimensione Formato  
Firm size Gabbi.pdf

non disponibili

Tipologia: PDF editoriale
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 94.93 kB
Formato Adobe PDF
94.93 kB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11365/36413
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo