Global perspectives

December 2025

This edition of Global Perspectives explores the latest developments and trends in financial services regulation, including the impacts of emerging risks, the potential for regulatory fragmentation and expanding regulatory perimeters.

The second half of 2025 has seen calm return to financial markets after the economic and geopolitical volatility of the first half of the year. However, as the IMF notes in its latest Financial Stability Report, there is “shifting ground beneath the calm” which could pose further challenges going forward. Regulators need to remain vigilant while at the same time trying to reduce red tape and unnecessary burdens on firms to help promote economic growth and competitiveness.

Uncertainty and challenges persist for financial services regulators and the firms they oversee. With continuing pressure to simplify rulebooks and reduce reporting and other regulatory burdens on firms, regulators are caught between the need to prioritize measures to promote growth, enhance proportionality and streamline regulatory engagement whilst keeping a watchful eye on emerging risks that may ultimately have systemic impacts. The pace of change – particularly in areas such as AI, digital assets and cyber risk – is unprecedented.

The trend towards national agendas, as flagged in our last report, continues – with global harmonization based on international standards becoming less and less likely in some areas as rules in different jurisdictions diverge and fragment to support simplification and competitiveness agendas. It’s not all one-way traffic though, with the FS regulatory perimeter expanding in some areas, for example critical third parties, ESG ratings providers and crypto asset providers.

Our overarching messages for firms:

• Continue to be vigilant for new developments, particularly emerging fragmentation of requirements;
• Ensure that governance, risk management, controls and systems are robust, resilient and fit for the future;
• Leverage the opportunities that regulatory streamlining may present; and
• Seek out ways to innovate – in a safe and controlled way – to benefit customers and the wider economy