Global Banking

Global Banking

Global Banking: Looking Ahead to 2020
1. Leaders of Ernst & Young's Global Banking and Capital Markets practice and an array of Wharton faculty members and other industry experts
  1. Scenario-planning exercise revealed five overarching trends that will continue to dominate the business of global banking over the next decade
    1. Regulation will be more onerous than in the past; Emerging markets will account for a far larger share of global economic activity, presenting both challenges and opportunities for cross-border banks traditionally base in developed countries; Business conditions will continue to be more volatile and unpredictable than in the years prior to the financial crisis; Profit margins will be narrower than in the pre-crisis era and Technology will act as a double-edged sword
      1. Twelve Uncertainties
        Regulatory environment; Economic shift; Globalization; Type and degree of competition; Financial crises; Lender of last resort; Debt situation; Securitization market; Retirement environment; Role of technology; Customer empowerment and posture; Credit protection rights
        What should Global Banks Do Right Now?
        Move into emerging markets; Invest heavily in technology; Develop a nimble culture
        Four Scenarios
        Change, Change, Change
        New Markets
        Financial Issues
        Business as Usual
        Six critical issues
        Regulation; Capital and returns; Emerging markets; nonbank competitors; Technology; Focus on the customer
Today's Reality: Finding Growth amid Business as Unusual
1. The Basel III proposals impose different layers of capital requirements
  1. Minimum of 4.5% of equity to risk-weighted assets, plus 2.5% that can serve as an additional buffer in some circumstances
    1. His additional layer has the effect of being mandatory, because banks that fall below capital thresholds can face undesirable consequences
2. Lessons learned from the financial crisis
  1. Around the world, economic uncertainty continues to agitate markets
    1. Banks have moved away from risky products of the past like securizations
      1. As the push for higher yield comes, it will cause organizations to build new complex products
3. How do banks rebuild trust in emerging and developed markets?
  1. Consumer in Western nations hold a poor opinion of large financial institutions, which they blame ofr causing the financial crisis
    1. The crisis has affected the reputation of banks everywhere
      1. The damage was so widespread, banks cannot simply abandon markets where they are disliked
        Surveys have shown that banks in the Asia-Pacific region suffered less repetitional damage than banks in the United States
4. The impact of increased regulatory costs on customers
  1. Regulatory requirements are becoming more costly to meet while profit margins are expected to remain narrow
    1. Banks will face additional capital requirements to offset risks associated with complexly structured products
      1. Customer backlash has proven significant enough for some of the larger banks to retreat from campaigns to assets fees on debit cards
    2. Bank must decide what costs to pass on to customers and whether high costs make it wise to exit certain lines of business
      1. Banks can pass higher costs on to customers will depend in part on the level of competitiion
5. Technology investments and employee training
  1. Global firms will have to make expensive investments in information technology
    1. Many banks that now need improved systems to better interact with customers face funding issues because they recently have invested heavily to upgrade back-office systems to meet regulators new demands
6. How level is the playing field?
  1. Because bank regulations have always differed form jurisdiction to juristicion, the playing field never has been entirely level
    1. As regulations continue to evolve, it is not clear whether global regulations will diverge or converge
      1. In the United States, the Volcker Rule is intended to restrict proprietary trading
      2. European firms may be at a disadvantage because they face tougher regulatory restrictions on compensation
7. Trust, transparency and institutional relationships
  1. Many institutional investors, regulators, and lawmakers questioned the banks effort in selling complex, structured products
    1. They will have to rebuild trust and provide more transparency
      1. Borrowers need a high level of trust before they will take the plunge on such an innovative product

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	Erstellt von Ana Sofia Luna vor fast 9 Jahre