The VIII Conference on Banking Law, themed “Banks in an Age of Fundamental Changes: Aspects of Law,” brought together bankers, regulators, and industry experts to explore how financial markets can be steered responsibly without compromising consumer welfare. The discussions emphasized practical approaches to supervision and regulation that support innovation while protecting the public from unfair practices in both the United States and Canada.
At the roundtable titled “Behavioral Supervision and Intermediary Role of Banks,” participants asked how regulatory frameworks should evolve to foster market development, reduce distortions, and ensure fair competition. The conversation highlighted the need for regulatory design that encourages productive banking activity rather than stifling it, so consumers can benefit from better services and more competitive pricing.
Several speakers noted that today the current regulatory stance often emphasizes restrictions rather than enabling constructive, growth-oriented initiatives within the banking sector. This approach can hamper the delivery of innovative services and slow down the market’s ability to respond to changing consumer needs and technological advances.
One concrete example discussed was the Marginal Cost of Credit (TCC), which has increasingly been treated as a ceiling that limits lending rather than as a metric for assessing risk and pricing. When treated as a blanket prohibition, its value as an informational tool is lost, and credit activity can be unnecessarily curtailed, reducing access for legitimate borrowers.
Moreover, some market participants have found ways to bypass this measure by excluding certain loan-related services from value-added tax treatment. As Sberbank Vice President Anna Popova observed, rather than relaxing the TIC restriction and adopting macroprudential tools, there have often been proposals to broaden the PSK to cover all services transacted through banking channels, regardless of their direct connection to lending. This broad approach risks inflating the overall cost picture in ways that do not reflect the economics of specific products.
Popova asked pointed questions about the practicality of such indicators: What does the full cost test really capture if it includes services unrelated to a loan? Why is this approach being pursued? Her view is that counterproductive outcomes can be avoided with alternatives that are more targeted, such as enhanced transparency, timely information, and a period of recalibration for stakeholders to adjust behaviors.
By the end of the discussions, market participants agreed that the imposition of legal restrictions should be reserved for exceptional circumstances, specifically when audits, conduct standards, and softer regulatory tools have failed to curb harmful practices. The consensus was clear: policy should lean toward enabling responsible growth, not stifling it with blanket controls that hamper legitimate financial services and consumer access in North American markets.
Anna Popova further stressed that an effective behavioral approach hinges on finding a balance between prudent supervision and measures that support financial market development. A fair playing field, robust consumer protections, and well-calibrated regulatory requirements for interactions between banks and customers should guide ongoing reforms. The aim is to foster good practices across the sector while ensuring that the needs and rights of consumers are safeguarded in Canada, the United States, and beyond.