Regulation 'hurting global business growth'
Regulation is having a negative impact on business growth and innovation, according to a new international survey of accounting, finance and business professionals.
The research by the International Federation of Accountants (IFAC) found that more than two thirds of accountants believe regulation is having a significant or very significant impact on their ability to innovate (63%) and grow their business (66%).
Four out of five respondents said that regulation is complex or very complex and is having a substantial impact on business costs.
Eighty-five per cent of respondents said they expected the impact of regulation to be more or much more significant in the next five years.
IFAC Chief Executive Officer, Fayez Choudhury said: "For many organisations, Basel III, recent EU reforms, Dodd-Frank, and multiple other sector- and country-specific regulations are all coming into play at once, and the scope of each is substantial."
Fayez Choudhury said that growth remains a global concern and that the findings of the survey "should be a wakeup call for us to examine the impact of regulation, including the regulation and reform introduced in response to the global financial crisis".
He added: "Good regulation is essential to the fairness, efficiency, and effectiveness of economies, and making it work as well as it can is a never-ending mission."
The IFAC Global Regulation Survey polled 313 accounting, finance and business professionals across a range of countries and businesses.
Regulation, then and now
The first Basel Accord for regulations in the banking industry, introduced in 1988, had seven risk categories and required seven calculations. Today's Basel III has more than 200,000 risk categories, and more than 200 million calculations.
The Glass-Steagall Act, a US banking law instituted in 1933 following the Great Depression, was 37 pages, compared with Dodd-Frank's Wall Street Reform and Consumer Protection Act, which was more than 2,000 pages in 2010.