Economy1 Comment

Flawed assumptions about market theory | Stiglitz

Colin Henderson

There is a serious flaw in Stiglitz argument that market dynamics naturally fail.  In fact this is a serious flaw in many who today categorise the credit and banking crisis as one that is a result of trust in natural market dynamics. The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, “I have found a flaw.” Congressman Henry Waxman pushed him, responding, “In other words, you … Continue reading Flawed assumptions about market theory | Stiglitz

Uncategorized7 Comments

Lets first understand why customers are using less online banking

Colin Henderson

Comscore report that people are using online banking less recently and marketeres ought to be worried.  Comscore have it wrong here.  (HT Finextra) Credit Crunch bites online banking | Finextra Marc Trudeau, senior director, financial services, comScore, says: “Americans have less cash, are spending less and have experienced a significant decline in the value of their assets. As a result, we’re seeing shifts in the way consumers manage their finances online, such as less frequent and shorter visits to their banking Web site, which has significant implications for marketers trying to reach new and existing customers.” Any time we see … Continue reading Lets first understand why customers are using less online banking

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Canada scorns World Economic Forum

Colin Henderson

Canada has three people attending the World Economic Forum next week in Davos. Business leaders from all sectors and from all regions will be well represented among the participants in this year’s Annual Meeting. Other participants include heads of NGOs and labour leaders, Social Entrepreneurs and Young Global Leaders. Scott Brison – M.P. Kings-Hants, Nova Scotia Richard B. Evans Chief Executive Officer Rio Tinto Alcan Inc. Laurent Beaudoin Chairman of the Board Bombardier Inc. Canada is small, granted, but three people to an annual conference of this magnitude, and at this point in history is lamentable. Continue reading Canada scorns World Economic Forum

AI1 Comment

Semantic search is closer than we think – some free tricks for banks

Colin Henderson

There is much talk of the semantic web as the next generation of internet. It is a little understood concept, and it is always assumed it will be seen as a new release of search – something dramatically different. Wikipedia: making it possible for the web to understand and satisfy the requests of people and machines to use the web content. The reality of the semantic web appearing might be different that we realise – in fact the advances in search that have quietly been implemented take us a long way towards the notion of search that works as humans … Continue reading Semantic search is closer than we think – some free tricks for banks

Uncategorized2 Comments

Fast forward to 2025 | banks as heavily regulated utilities, what of innovation?

Colin Henderson

The annual World Economic Forum kicks off next week in Davos-Klosters, Switzerland, 28 January – 1 February 2009 with the headline “Shaping the Post-Crisis World”. Obviously the financial world order is a topic, and this document sets out some scenario’s for disucssion at the forum. Mirror –> thefutureoftheglobalfinancialsystem1. The question posed by the 88 page document is this “How might the governance and structure of the global financial system evolve over both the near-term and long-term?” Its a fair question, and with the 2025 date its far enough out to get beyond the 2 week view that governments have adopted. … Continue reading Fast forward to 2025 | banks as heavily regulated utilities, what of innovation?

Uncategorized1 Comment

If the problem we have is too much debt – how will more credit solve that problem?

Colin Henderson

Prescient words from the House of Lords in 1803.  Britain was at war with France, and the resulting financial system upheaval was the topic here. BANK RESTRICTION BILL | Hansard (UK Parliament – 13 December 1803) Lord Grenville said, … … The fundamental principle of all governments on this subject ought to be, that credit and circulation, if undisturbed by legislative interference, will invariably find their own level. Whenever any temporary purpose (as must sometimes happen) induces a departure from this principle, the misfortune is, that the first deviation too commonly leads to the necessity of a second, and so … Continue reading If the problem we have is too much debt – how will more credit solve that problem?

US

Bank of America have the right approach – just implementing new things and learning

Colin Henderson

One thing about Bank of America that I like at the moment is that they are just doing things.  I covered their use of twitter the other day, but its worth placing in perspective.  They are trying many things, including applications specific to the top two business smart phones shown below – iphone and Blackberry. To me this iterative small, one thing at a time is essential.  The bank gains learning, and importantly gains the following of the early adopters, who will support momentum towards mainstream usage. Bank of America iphone Bank of America Blackberry UPDATE: Some additional statistics requested … Continue reading Bank of America have the right approach – just implementing new things and learning

Business Models, Economy, regulation

banking 101 | All banks are vulnerable to runs

Colin Henderson

This is a fascinating and insightful paper by Willem Buiter and Anne Sibert on the failure of the Icelandic banking system, but with scary parallels to the UK system and others.  In particular though, and of interest to everyone possibly is section 2.1 copied below in full.  It defines the generic vulnerability that all banks’ have to “run a on the bank” even in good times. Thus the argument goes, accept reality, nationalise the banks, and treat basic banking as a utility, just like water and electricity, until a better model can be developed that would have a better chance … Continue reading banking 101 | All banks are vulnerable to runs

niall ferguson2 Comments

Niall Ferguson on CNN Global Public Square

Colin Henderson

Fareed conducted a wide ranging interview and the pragmatic & intelligent conversation from Ferguson spoke of: the importance of avoiding protectionism that was the real culprit of the 30’s depression the potential for innovation in industry, technology and financial services. Innovation accelerates in bad times he pointed out – eg IBM arose from the depression. UPDATE: The video will appear here in due course. Continue reading Niall Ferguson on CNN Global Public Square