Shedding Light on Non-Financial Risks – a European Survey

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

7. Appendix

Table 8.1.4: Country group average of regulation on transparency, information and governance [1] [2] [3] [4] [5]

[6]

[7]

Full sample mean

0.55

0.48

0.58

0.65

1.06

1.26

0.52

Group 0 diff-to-mean (RoE)

0.11

0.01

0.07

-0.09

-0.12

0

0.06

Group 1 diff-to-mean (Fr)

-0.02

-0.01

-0.02

-0.01

0

0.06

0.1

Group 2 diff-to-mean (UK)

-0.43 **

0.1

-0.33

-0.27

-0.1

-0.26 ***

-0.36

Group 3 diff-to-mean (Ge+Au+Nl)

0.28

0.02

0.2

0.35

0.33

0.02

-0.02

Group 4 diff-to-mean (Lux+Irl)

-0.01

-0.11

0.04

0.23

0.13

0.14

0.09

ANOVA F 0.59 * denotes significance at the 10% level, ** at the 5% level and *** at the 1% level. “Fr” is France, “UK” is the United Kingdom, “Ge+Au+Nl” is Germany, Austria and the Netherlands, “Lux+Irl” is Luxembourg and Ireland, and “RoE” is the rest of Europe. Answers are coded in the following manner: -2 for Strongly disagree, -1 for Disagree, 0 for Unsure, 1 for Agree, 2 for Strongly agree. [1] Regulators should enforce better governance through an increased role for independent administrators. [2] Regulators should enforce better governance through reinforced responsibilities for auditors. [3] Regulators should enforce better governance through greater fiduciary duties of administrators. [4] Regulators should reinforce governance by appropriate code of conduct of fund managers (such as the EFAMA code for external governance). [5] Fiduciary duties of asset managers should be reinforced by stating that they must invest for the sole benefit of their clients. [6] Regulators should ensure that the information is indeed fair, clear and not misleading. [7] Legal penalties should be put in place for rating agencies. 1.2 0.11 0.74 1.34 0.79 0.77

Table 8.1.5: Country group average of regulation on capital protection and financial responsibility [1] [2] [3] [4] [5]

[6]

[7]

Full sample mean

0.65

0.85

0.7

-0.1

-0.06

0.14

0.19

Group 0 diff-to-mean (RoE)

-0.06

-0.07

0.05

0.07

0.05

0.1

0.19

Group 1 diff-to-mean (Fr)

0.17

0.15

-0.15

0.22

0

-0.14

-0.4 **

Group 2 diff-to-mean (UK)

-0.24

-0.31 ***

0

-0.36

-0.19

-0.23

-0.19

Group 3 diff-to-mean (Ge+Au+Nl)

0.07

-0.13

0.35 ***

-0.34

0.17

0.24

0.19

Group 4 diff-to-mean (Lux+Irl)

0.08

0.34 ***

-0.17

0.14

-0.05

0.01

0.15

ANOVA F 1.65 * denotes significance at the 10% level, ** at the 5% level and *** at the 1% level. “Fr” is France, “UK” is the United Kingdom, “Ge+Au+Nl” is Germany, Austria and the Netherlands, “Lux+Irl” is Luxembourg and Ireland, and “RoE” is the rest of Europe. Answers are coded in the following manner: -2 for Strongly disagree, -1 for Disagree, 0 for Unsure, 1 for Agree, 2 for Strongly agree. [1] Greater fiduciary duties should be required of depositaries. [2] A clearer responsibility regime should be instated for depositaries, with monitoring and obligation of means. [3] Asset managers should have greater responsibility regarding non-financial risks. [4] A European regime of retail investor insurance (ICSD) should be created. [5] The availability of private insurance against non-financial risks should be required. [6] Capital requirements should be increased for all intermediaries. [7] Risk-based capital requirements (based on ratings of non-financial risks) should be applied to asset managers. 0.67 1.67 1 1.24 0.36 0.67

Table 8.1.6: Country group average of regulation on distribution [1] [2]

[3]

[4]

[5]

Full sample mean

0.61

0.94

-0.32

0.7

0.59

Group 0 diff-to-mean (RoE)

-0.14

0.13

0.2

0.06

-0.25 **

Group 1 diff-to-mean (Fr)

0.09

-0.05

-0.27

-0.37 **

0.05

Group 2 diff-to-mean (UK)

0.21

-0.02

0.06

0.09

0.19

Group 3 diff-to-mean (Ge+Au+Nl)

-0.06

0.17

0.1

0.53 **

0.19

Group 4 diff-to-mean (Lux+Irl)

0.04

-0.32 **

-0.2

-0.08

0.18

ANOVA F 1.66 * denotes significance at the 10% level, ** at the 5% level and *** at the 1% level. “Fr” is France, “UK” is the United Kingdom, “Ge+Au+Nl” is Germany, Austria and the Netherlands, “Lux+Irl” is Luxembourg and Ireland, and “RoE” is the rest of Europe. Answers are coded in the following manner: -2 for Strongly disagree, -1 for Disagree, 0 for Unsure, 1 for Agree, 2 for Strongly agree. [1] Distributors should have complete responsibility as the first line of defence for investors, but it could fall back on other parties if they have provided inappropriate or misleading information. [2] Responsibilities should be clarified ex ante according to who controls each subset of information. [3] Depositaries should have a strong responsibility of control of all marketing information. [4] Asset management firms have a central role in the delivery of information, so they should have the central responsibility in the distribution for their products. 0.5 1.3 1 2.22 ***

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