regulation2 Comments

Bank capital levels around the world are low and sufferring

Colin Henderson

The IMF report had a spreadsheet in the appendix with bank capital levels around the world. While it has individual countries, I summarised into this chart.  The data shows Capital as a percentage of Assets so higher is good, lower is bad. Note the negative trends in most except Canada, and this is based on the latest data to end of 2008.  Use the thumbnail for a larger version that is clearer. Continue reading Bank capital levels around the world are low and sufferring

Economy1 Comment

Loan losses could reach $4 trillion | requires additional bank capitalisation of up to $725 bn

Colin Henderson

The IMF has released its semi annual Global Stability review, that few paid attention to before, but now has much increased visibility.  In particular this week, with Geithner about to release the results of the bank stress tests, this pre-empts the Fed leaving much little room to manoeuvre in understating the outcomes. Bottom line – the IMF sees $ 2.7 Tn in US based originated write offs and $ 4 Tn in total write offs, with banks absorbing 2/3 of that. IMF Global Stability Review – April 2009 Without a thorough cleansing of banks’ balance sheets of impaired  assets, accompanied … Continue reading Loan losses could reach $4 trillion | requires additional bank capitalisation of up to $725 bn

Japan

Retail banking: Concerted effort to engage with the customer | Japan

Colin Henderson

It is interesting to watch how banks are looking to move beyond the banking crisis.  Here is an example in Japan, which is already highly focussed on their customers.  Sumitomo Mitsui Bank is initiating new processes and methods to generate even better customer focus. Retail banking: Concerted effort to engage with the customer | FT Loiter in a Tokyo branch of the Sumitomo Mitsui Bank and you will notice some changes. There is still a large closed-off area of bank officers shuffling documents, but there are now two counters, a high one at which to make deposits and transfer money, … Continue reading Retail banking: Concerted effort to engage with the customer | Japan

Innovation

FinovateStartup 2009 Conference highlights the future of banking

Colin Henderson

Jim posts a nice review of the types of demo’s at Finovate coming up.  Wish I was there!  I am especially interested in 1. 2. and 6.  – these are concepts that are bank shifting, and will wake banks up. I like where Netbanker is going and I am thinking the same way.  As a group we used to be focussed on online banking evolution, but that horse has left the barn.  Banks are too focussed on getting issues of capitalisation and asset values.  As those matters evolve and the banks we used to look to for innovation develop into … Continue reading FinovateStartup 2009 Conference highlights the future of banking

Economy

World Bank updates Global economic prospects downward

Colin Henderson

This revised forecast shifts from 2010 recovery,to an uncertain 2010 recovery.  Read through for data and forecasts on your country. World Bank updates global forecast This update of the projections in the World Bank’s Global Economic Prospects report (GEP) of December 2008, reflects the rapid  deterioration in financial and economic conditions—and the increasingly negative interaction between weakening economies and fragile financial systems—that have come to the fore since late 2008 for virtually every country in the world. gep-update-march30-2009 PDF Continue reading World Bank updates Global economic prospects downward

Uncategorized

Financial Innovation and Consumer Protection | Bernanke has the wrong culprit

Colin Henderson

Chairman Ben S. Bernanke speaking at the Federal Reserve System’s Sixth Biennial Community Affairs Research Conference, Washington, D.C.  His topic is innovation and the risks to consumers from that innovation. First the sources of innovation. Financial Innovation and Consumer Protection | Bernanke Sources of Financial Innovation Where does financial innovation come from? In the United States in recent decades, three particularly important sources of innovation have been financial deregulation, public policies toward credit markets, and broader technological change. I am interested in the third group in particular – technological change. On the technological front, advances in information technology made possible … Continue reading Financial Innovation and Consumer Protection | Bernanke has the wrong culprit

Economy

Transparency pledge in bank stress tests – now May 2009

Colin Henderson

Confusing messages coming out on the timing of the Bank stress tests – now expected May. Transparency pledge in bank stress tests | FT The White House on Wednesday pledged “transparency” over the stress tests used to assess the health of the biggest US banks, as officials pushed wary banks and regulators to agree to disclose as much information as possible. Robert Gibbs, US presidential spokesman, said that “early in May” there would be “transparency of determining and showing to all involved some of the results” of the tests. Continue reading Transparency pledge in bank stress tests – now May 2009

Business Models

RBC speak about convergence for EBPP and statements

Colin Henderson

The commentary here from Colin McKay, vice-president of e-business architecture RBC in this video interview, is refreshing to hear from a Bank. RBC discusses client reporting and customer statements | IT World Canada Some notes from the interview, then commentary and discussion: Old process had product and IT groups generating 18 separate statements in different formats but most ending up in print each statement feed was formatted specific to the output, eg, print or web each of the 18 had their own processes all 18 feeds have been directed to a common store, and stored as raw data the 18 … Continue reading RBC speak about convergence for EBPP and statements

Uncategorized

Bank wages and regulation are inter-related

Colin Henderson

This paper reviews financial services over the past century, and concludes that banking wages are generally less as an industry during periods of increased regulation. Cutting back financial capitalism is America’s big test | FT In recent research, Thomas Philippon of New York University’s Stern School of Business and Ariell Reshef of the University of Virginia conclude that the financial sector was a high-skill, high-wage industry between 1909 and 1933. It then went into relative decline until 1980, whereupon it again started to be a high-skill, high-wage sector.* They conclude that the prime cause was deregulation, which “unleashes creativity and … Continue reading Bank wages and regulation are inter-related