The prevailing political mood in Europe is marked by fear,
pessimism and retribution. The consensus view among many
audiences is that banks and businesses have been underregulated
for far too long; tougher regulation is needed to
rein in and punish reckless corporate behaviour. Those who
try to resist this strong political current face a tough and
unrewarding struggle. Instead, companies should seek to
channel rather than block the regulatory wave or risk being
swept away in a rip tide of controls.
Today, openness and transparency are no longer corporate
virtues to be merely aspired to; they are the requirements
of everyday behaviour and a business’s best defence.
Increasingly, policymakers and stakeholders expect to be
kept informed. Most important, a company needs to tell
its own story, not have others write the script. Strong and
consistent messaging is no universal panacea. But it can
help soften regulatory burdens, mitigate market reactions
to negative news, and win some goodwill among investors,
employees and customers whose support may prove critical
through the challenging times ahead.
Take the profound crisis afflicting Europe’s banking system
Still, banks need not accept this situation as a fait accompli.
In fact, they have a strong argument for persuading
regulators that the deadlines set in 2008 and 2009 no longer
make sense given the economic turmoil that followed
the original crisis. Banks can work towards convincing
authorities to extend the capital ratio deadline beyond 2013,
individually or even collectively. By that time, the market
may have improved to the point where the assets will fetch
something closer to what banks see as true valuations.