Financial regulators around the globe should consider 10 different areas as they look to further strengthen stability following a tumultuous decade of regulatory changes throughout the financial ecosystem, according to a white paper from BlackRock.
The white paper, "The Decade of Financial Regulatory Reform: 2009 to 2019," details regulatory reform throughout the past decade on a global basis, and advises the areas in which regulators need to focus on after those reforms have fundamentally changed the regulation of asset management.
One area in which the white paper advises regulators to focus is underfunded government pensions, citing the $7.8 trillion in underfunded liabilities globally.
"Given the funding shortfall for many plans, pension funds bear significant counterparty risk, as they may not be able to pay the amount required to meet pension benefit obligations to retirees under the current framework," the white paper says.
Other areas in which regulators should focus are: Cybersecurity; reform of cash investment vehicles; the MiFID framework; investor confusion regarding how exchange-traded products are classified; market fragmentation in Europe and elsewhere; central clearing counterparties' risk mitigation, disclosure and governance practices; equity trading market resiliency; the transition to alternative risk-free rates from LIBOR; and bondholder rights.