A new study has found that leading
financial institutions are spending more on regulation and compliance.
The In Control study, by Deloitte, says that the world's largest institutions have seen a rise in expenditure of more than 30 per cent in the past three years, to a total of £28 billion.
It predicts that the governance and control bill could hit £50 billion by 2010, without even taking into consideration any new regulations introduced due to the current credit crisis.
The investment in regulation and compliance can only be effective if there is an integration of governance, risk and compliance strategies between the two areas, the survey suggests.
Deloitte says that the inability to link the factors is a prime feature behind recent losses incurred by major
banks in the credit crunch.
Chris Gentle, head of research for Deloitte, said: "Current market dynamics dictate that there are few more vital issues for financial institutions to address than risk appetite, governance and control."
Deloitte is a brand under which professionals in independent firms around the world provide financial, consulting and risk management services.
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