Ever since the start of the Financial Crisis, everywhere around the world governments are trying to find general applicable regulations that make sure such a crisis will not occur again.
On 30th June 2010 the German “Bundesanstalt für Finanzdienstleistungsaufsicht” (Federal Institute for Financial Services Supervision) published a paper called “Mindestanforderungen an Compliance” (Minimum standards of Compliance), as a structured collection of previous regulations and interpretations (CFO world). It is compulsory for all financial services companies to implement it by end of year 2010.
With this paper the Federal Institute of Financial Services Supervision aims to enhance the trust of investors in the functionality of the capital market, to protect investors as well as financial services companies including their employees and to strengthen the institutional functionality of capital markets (download paper). Being the first standardized set of regulations it emphasizes which duties concerning organization, behavior and transparence financial services companies have to implement if they provide transactions in securities for customers.
What does this mean for financial services companies in Germany? Will they stop dealing in risky financial products or will they just try to convince investors that they follow those newly established regulations?
I believe it might be a step into the right direction, as banks, insurances and other financial services companies obviously did whatever they wanted out of greed, power and competition before the financial crisis. On the other hand it might not be very effective as everything seems to be back to normal in the capital market already, without anyone asking what effects the last crisis really had.