Regulation seen burdening small private banks

By Lisa Jucca

GENEVA (Reuters) - Small players in the private banking sector will suffer from an increase in transparency requirements that is expected to follow the recent financial markets crisis, bankers said on Tuesday.

The credit crunch, triggered by defaults on U.S. subprime mortgages, prompted regulatory calls for increased financial disclosure, especially in Europe.

"In the next 12 to 15 months we will see regulation coming in everywhere in the world," said Nicolas Cagi Nicolau, Global Head of Structured Products at SG Private Banking.

"This will clean the market."

Earlier on Tuesday, European Union finance ministers agreed to review a slew of financial rules to address a need for more clarity on investments in structured vehicles, conduits and other products that have been at the centre of the credit crisis.

In the United States, the Federal Reserve and the Securities and Exchange Commission met banks to look at their books.

Cagi Nicolau said only the larger private banks would be able to absorb the costs of providing additional information on complex financial products.

"Small banks, family offices will not be able to respond to all the constraints," he said. "You really need to give more information and expertise."  Continued...