Multiple regulators and compliance costs asymmetries in the investment services: Does Firm Size Matter?

This research focuses on the advancement of the Compliance function within financial intermediaries. Eighty four financial firms (banks, investment companies and insurance companies) took part in this research. Two criteria have been used to interpret the results: 1) the prevailing workability within international and domestic intermediaries; 2) the intermediary typology, creating a distinction between banks, and of these cooperative banks, other financial intermediaries (investment companies) and insurance companies. We found that players are sensitive to minimize sanctions; the sample is almost perfectly balanced between intermediaries who implemented some methodologies to measure the risk and those who do not, but banks appear to be more measuring oriented, especially in terms of event probability and loss given event. This finding and the different regulatory perimeter among financial firms addresses the question about the existence of size effect which could reduce the compliance attitude when either the enforcement is not big enough to deter rational misconduct.