Using the advanced finance skills I acquired early in my career (MCT of course), I was seduced to working in non-financial corporates - “the real economy”.
It was great fun managing the financial risks arising from making products and services and then selling them to customers all around the world. All the time we were focussed on adding shareholder value, and of course beating the competition. It never once occurred to me that conducting our international trading operations in a particular manner, or indeed using financial instruments, developed by a regulated industry, to manage the underlying implicit trading risks would one day be deemed to be so systemically important that they required close attention. How naïve I was.
Of course it was obvious that corporate treasures around the world want a strong financial services industry capable of supporting the business needs of commercial and industrial companies. However, post GFC, someone, somewhere, has seemingly veered off the path.
Where is the overarching, well-coordinated global regulatory plan?
We now seem to be in danger of contributing to, and even creating, fiscal, regulatory, reporting and behavioural conditions which lead to non-financial corporates either seeking not to manage the underlying financial risks in their business (basically comply or explain), and/or seek new regulation free alternatives. Neither seem to be an optimal response. Was this the intended consequence? I think not.
On reflection, where I think I went wrong was that I didn’t have to hand the now seemingly “out of print” Heath Robinson picture book of Global Regulatory Compliance. Sadly, W. Heath Robinson died 70 years ago this month. We have therefore been deprived of his particular skill as an illustrator. He was famed for his elaborate drawings of fantastically complex contraptions seemingly designed to fulfil very basic needs. With this image in mind, I urge you to read Tom Deas’s article (Chairman of the International Group of Treasury Associations (IGTA) in in this month’s Treasurer). A picture often tells a thousand stories. How would Heath Robinson have illustrated Tom’s article? Read it and weep. Then dry the tears and raise a smile and think how the Heath Robinson contraption to supporting global growth would have been pictured. Unbelievable.
Tom, thank you. Of course we need joined up regulatory thinking.
Don’t forget to come along to the ACT’s Regulatory breakfast later this month. We encourage you to listen and budding artists amongst you, please doodle away - you may find you have something of the ‘Heath Robinson’ in you.
Of course the ACT, the EACT and IGTA will continue to raise our regulatory concerns to those bodies who have a listening ear. At times it can be slow, painful and fruitless work - but vitally important. Please cheer us on.
All the best
