Sands sounds warning over red tape rush
THE CHIEF executive of Standard Chartered has warned of the danger of an “avalanche” of global regulation as the bank posted record profits for the ninth consecutive year.
Peter Sands said new capital rules could increase protectionism and described the regulatory agenda as “driven through the rear view mirror”.
“All of us [banks] face the challenge of the ongoing avalanche of regulation. None of us can be complacent about the continuing fragility of the system.”
Sands said Standard Chartered is supportive of Basel III but warned that national variations are creating “incredible complexity, huge costs, and a multitude of unintended consequences,” such as protectionism.
The bank posted an 11 per cent rise in pre-tax profit to $6.78bn (£4.25bn) for 2011. Bonuses were flat at £800m and total staff costs rose 15 per cent with underlying wage inflation of about five per cent. Sands said the bank faces “acute” competition to hire and retain staff, echoing concerns expressed by HSBC earlier in the week.
He also warned over central bank injections on the day 800 banks – but not Standard Chartered – took €530bn (£443.58bn) in cheap ECB loans. “Central bankers are pumping money in but, in doing so, risk laying the seeds for the next crisis.”
The bank, which makes most of its profit in Asia, said its growth was led by Singapore but its surplus fell in the major markets of India and Korea. It paid a British bank levy of $165m.