Cost of Divergence: Inconsistencies in regulation among various jurisdictions—regulatory divergence—cost financial institutions between 5% and 10% of their annual revenue, according to a survey of 251 compliance and risk-management officers and senior leaders by the International Federation of Accountants and Business at the Organization for Economic Cooperation and Development. Just over half (51%) said that in the last five years, they spent resources on regulatory divergence that they wanted to allocate to risk management.
“This consumes scarce senior management time, as well as capital, that could otherwise be focused on identifying emerging risks in the financial system. Ultimately, these costs are a barrier to international growth,” said the report….
