The new financial system: Dennis Nally, PricewaterhouseCoopers

With world leaders discussing what change to the financial system, PricewaterhouseCoopers Global Chairman Dennis Nally is saying it is already changing and its a matter of managing the changes required.

Speaking with RT, he began by noting that a key part of the change is bringing in regulation to financial players which in the past weren’t regulated.

DN:  “We will, in fact, see organisations that were historically were not regulated – they will be regulated, going forward. Hedge funds are a good example of that. Changes to what ratings agencies can do, and should do, to go forward. So I think you are going to see changes. The challenge will be trying to get the right type of balance, so that you don’t over regulate, to the point where you really stymie, you know, future business, future growth, entrepreneurialism, the things that really make our economies move forward."

RT:  How do you see the post crisis world of the big four?

DN:  "You know the accountants, the spotlight has been put on us in terms of this whole debate around fair value accounting, for example. And you know, that fair value accounting has had a problem, that it caused the crisis. I don’t think this was an accounting issue, quite frankly. Are there changes that need to be made to the fair value accounting model? Sure! And that will be forthcoming. But the role that we play in ensuring the integrity of the capital markets is a critical role today, and will continue to be a critical role into the future as well."

RT:  Will the financial world be another place, less attractive?

DN:  "I don’t know it will be less attractive, it will be different. You’ve already begun to see that. In the United states for example the separate of investment banking from the money centre banks. That’s a fundamental change, if you will, to what those institutions did pre financial crisis. Those are changes that are designed to make sure that the conflicts that potentially were there, during this crisis, that those conflicts don’t exist on a go forward basis. So you will see those kind of changes taking place, it will be different, and obviously we are working our way through all of those issues as we speak. But it will be a very different place 12 – 18 months from now, than it was 12 months ago."