Post-Collapse Regulations Pose Challenge to Banking Industry

Finance chiefs at banks throughout the world are growing increasingly concerned about the impact of new regulations on market operations.

The 2008 financial collapse, as well as recent risk management failures at European banks, have prompted a slew of new reforms, and according to a report from Ernst & Young, those efforts have the potential to radically alter existing operating models.

A good example of this trend can be seen in the credit card industry, where a number of leading banks and card issuers have begun levying new charges and fees on consumers themselves. This is in response to the Durbin Amendment in the Frank-Dodd Wall Street Reform and Consumer Protection Act, which calls for a cap on the credit card "swipe" fees that merchants pay to issuers.

Wells Fargo, SunTrust and Bank of America have all initiated or considered implementing debit card fees, while networks such as Visa and MasterCard may begin charging retailers on small debit-based transactions.

"We regularly review market conditions to balance the needs of all constituents," MasterCard recently stated, according to the Wall Street Journal. "[Price cap regulation] will - and has - created distortions in the market."