Shedding Light on Non-Financial Risks – a European Survey

Shedding Light on Non-Financial Risks – a European Survey — January 2012

1. Introduction

delimitations do not ensure a unified framework and common supervisory and judicial cultures for settling such disputes. In practice, it is not obvious that one can remedy the inconsistencies both in country laws and supervisory cultures, 4 particularly for fiduciary duties. Our survey aims to contribute to this regulatory debate by providing, some more detailed insights into the concerns and priorities of the industry on all of these themes. After a general view of the situation and its recent changes, we study the need for changes in regulation and risk management practices for the various categories we have previously discussed. We then take a look at the costs this regulation would entail and the willingness of professionals to consent to them in exchange for increased protection. Finally, we consider the limitations of regulation and some alternative solutions. 1.1. Profile of Respondents We conducted a survey between 27 June and 18 September 2011. It took the form of a self-administered online questionnaire, specifically targeted at the European fund industry. We collected 163 replies from professionals of various categories of firms (see table 2.1.1). High-level professionals of diverse horizons asked to be contacted for Table 1.1.1: Split of respondents by firm type (in percent) Asset manager Pension fund Reseller Insurance company

further discussion, and we ran a number of follow-up phone interviews. Those discussions shed light on some of the respondents’ answers. For the purpose of the analysis, we have isolated different geographic zones for our respondents (see the breakdown in table 2.1.2). France accounts for the largest share, with over a fifth of the participants. Luxembourg and Ireland account for almost 17%, followed by the United Kingdom, Germany, Austria and the Netherlands. Other European countries still represent more than a third of responses, which testifies to the geographic diversity within our survey. For more in-depth comparison, we provide detailed zone-by-zone averages in each part, together with statistical analysis of variance (ANOVA) to test whether the country group separation is pertinent for a given question, which is provided in the appendix.

4 - While the ESMA will contribute in homogenising the country implementation of financial regulations, the homogenisation of non-financial laws and supervisory cultures is a more difficult exercise.

AM servicing

Consultant

Other

Regulator/ supervisor

Lobby

41.6

15.5

9.3

8.7

7.5

6.8

6.8

2.5

1.2

Table 1.1.2: Split of respondents by geographic zone (in percent) France Luxembourg, Ireland United Kingdom Germany, Austria, Netherlands

Switzerland Portugal, Italy, Greece, Spain

Nordic countries

Other

22.1

16.6

14.7

11.7

9.8

6.1

4.9

14.1

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An EDHEC-Risk Institute Publication