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Systemic Risk | Was Lehman Brothers too big to exist?

Colin Henderson

Here is a blog concept from Harvard Business that might be interesting to you.  The idea is to focus on summarising new evolving big picture themes for business people. Behind the breaking business news is often a management idea gone right or wrong. That’s where the Conversation Starter comes in. With this blog, we hope to shed new light on major events and trends in the business world by helping unearth the bigger ideas at work and discussing how those ideas are shaping our lives every day. We hope you’ll join the conversation. This one caught my attention.  It speaks … Continue reading Systemic Risk | Was Lehman Brothers too big to exist?

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The irony of Citi’s request of a Democratic government

Colin Henderson

There is a high degree of irony in this story.  We have a bastion of capitalism, Citi requesting a 40% government ownership, accompanied by a Democratic US government stating its belief in private ownership. The impossible inevitability will meet the inevitable impossibility  …  eventually. Citi presses officials to take 40% stake | ft.com Citigroup is pressing the US government to agree on a new capital injection that would increase the authorities’ stake in the troubled bank to about 40 per cent but stop short of an outright nationalisation … They (US Government) apparently believe that the market response to White … Continue reading The irony of Citi’s request of a Democratic government

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UK government, RBS, and Lloyds begin the bad asset removal process

Colin Henderson

In the first real appearance of specific moves towards the inevitable Great Unwinding RBS announce plans to reduce their balance sheet by 25%. RBS to cut balance sheet by 25% | ft.com Royal Bank of Scotland will this week unveil plans to shrink its balance sheet by up to a quarter over the next three to five years as Stephen Hester, chief executive, sets out a strategy to return the state-controlled bank to the private sector. Note the timeframe of three to five years – I suspect this will be on the shorter end of that timeframe or even less … Continue reading UK government, RBS, and Lloyds begin the bad asset removal process

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Canadian banks prove envy of the world | ft.com

Colin Henderson

Following the Presidents visit to Canada today, Canadian banks and the Canadian system continue to get attention. Canadian banks prove envy of the world | ft.com “Canada has shown itself to be a pretty good manager of the financial system in ways that we haven’t always been here in the United States,” Mr Obama told a Canadian broadcaster. The president spent Thursday in Ottawa meeting Stephen Harper, Canada’s prime minister, to discuss the economy, trade and the environment, in addition to any talk surrounding the strength of Canada’s banks. In large part because of their conservative culture, one that depends … Continue reading Canadian banks prove envy of the world | ft.com

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Monitise expands into the African growth mobile market

Colin Henderson

Monitise continues to grow, expanding into the African growth mobile market. Monitise joins battle for East African m-banking customers, gets US$1.5m funding | Finextra Monitise has been awarded US$1.5 million by the Africa Enterprise Challenge Fund (AECF) to help fund the launch of its mobile banking and payments service in East Africa. Monitise East Africa will initially offer services in Uganda and then plans to expand into neighbouring countries, including Burundi, Democratic Republic of Congo, Ethiopia, Kenya, Rwanda, Tanzania and Zambia. The service will enable the provision of banking, payment and money transfer services by both banks and mobile networks, … Continue reading Monitise expands into the African growth mobile market

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Sub title is too limiting for the blog – need new ideas

Colin Henderson

“Which banks get the web lifestyle”.  This tagline is becoming tired.  Since I began this blog the tagline was my simplistic way of maintaining focus and relevance for the posts.  In effect it was my filter for posts and helped me determine what was in and what was out.   It may seem minor, but becomes important to me to manage how and what I think about., and therefore write about. Over the last few years two forces have changed things;  the credit/ banking/ economic crisis for one, and the impact that is having on banks corporate ownership and structure – … Continue reading Sub title is too limiting for the blog – need new ideas

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Disaster Myopia and other causes of banks’ problems

Colin Henderson

Andrew Haldane, Executive Director for Financial Stability, Bank of England diagnoses the failure of bank stress tesing in this speech given at the Marcus-Evans Conference on Stress-Testing.   He speaks of the Oct 87 crash, the LCTM hedge fund 98 failure as well as the 2007/8 crash. Why Banks Failed the Stress Test:  Bank of England pdf He sees three categories of failure: Disaster Myopia Essentially this is positive thinking that increases the longer since the last disaster.  He only somewhat jokingly wonders whether “10 years is the threshold heuristic for risk managers.” Network externalities He speaks of the financial system … Continue reading Disaster Myopia and other causes of banks’ problems

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Consumers still need convincing on smart cards

Colin Henderson

Fewer than half of consumers would  switch to smart cards according to a “survey” by  terminal makers Ingenico. They arrive at the conclusion based on surveying people using the cards. There is an enormous gap between use of cards, and the benefits of the cards.  The simple truth is that people do not associate any benefits with the switch to the smarter cards. Convenience to drive contactless uptake, but consumers still need convincing | finextra Convenience, rather than security, will be the driving force behind the UK adopting new payment methods, according to a survey of 1000 British consumers conducted … Continue reading Consumers still need convincing on smart cards