Wednesday, September 17, 2008

Reshaping banks for the future

In the current credit climate where banking CEOs may be having difficulties sleeping well at night, guest blogger, Guillermo Kopp of TowerGroup, says commonsense needs to prevail if banks are to reshape themselves for a brighter future.

Amid the turmoil in financial markets, one might think that a sense of fear or conscience would keep CEOs on edge around the clock. At a Sibos panel moderated by Juan Senor, several CEO-level executives shared their formula for a good night's sleep. They favoured the following approaches:

- Spreading the liquidity and credit risk, broadening the sources of funding with retail deposits, and protecting from the short-term shock

- Balancing defensive strategies with proactive innovation in business models and integrated processes

- Partnering with an ecosystem of industry providers that deliver optimal value to the end clients

- Revisiting the approach to risk management with the right people, skills and tools to balance risks versus rewards

- Rebuilding confidence and trust through more transparent valuations and asset pricing.

TowerGroup believes that common sense should prevail and that CEOs must focus on steering through the present turmoil with their view set on reshaping an interdependent industry for a brighter future.

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