Dismantling in bancassurance Dutch, accelerated concentration in global asset management, rumours denied large French banking merger, large switching time resumed. The crisis highlights the contrasts between the winners and losers; It feeds the external growth initiated by the first.
For reasons of economies of scale, the global banking industry is on the eve of a movement of concentration which will not be without pose formidable problems to the public authorities of supervision and, from a certain threshold, the competition authorities. But this race to the critical size does not explain everything. As in any other sector, the banking industry is facing a shift in the value in the production chain and the crisis did not exacerbate old trends. In this context, can what trade-offs between activities be identified in light of announcements in recent months
The retail bank, that arouses the attention of the authorities because the closer to economic agents, crosses a difficult pass with the fall of the production of the credits to the economy. The fragility of the banking operations resulting largely explains the pursuit of a very accommodating monetary policy on both sides of the Atlantic. This is because the risk of bank failures are still very high, especially in the United States, central banks must remain patient in the end of 2009.
Beyond the short term, the context of a sustainable debt of the private officers announcement of poor Outlook for the banking activity. It is number of years it will take effective before hoped a return to normal, or a long period of belt-tightening for the "retail banking".
The concentration movement in the management of assets ("asset management") are an another line marking the recent period. For regular returns and well controlled risk activities, it may seem surprising to see major global networks to separate from their subsidiaries of management.
Beyond the classical argument of economies of scale, the need to strengthen their own funds seems to have its share of responsibility in the choice of banks. To fulfil the new obligations that will rise to the G20 in Pittsburgh, they can count on their only profitability, nor on their ability to raise capital on the markets. They will also have to sell a portion of their assets to free up resources and subsidiaries of "asset management" are assets of choice.
If retail banking is permanently disabled by the debt of private actors, if asset management is easily marketable to increase own funds, to what large global banks will - they then re-deploy It is not one of the least paradoxes of this crisis out of standard that the funding and Investment Bank (BFI), yet in the heart of the crisis, finally activity favoured by the major global banking players.
In fact, it is to the good of this activity in the first half of 2009 that banks had to repay early so consensual public advances. Similarly, the magnitude of the bonuses announced in this year of crisis is a reflection of a profitability out of the BFI in 2009. Despite the high risk which he attached, the BFI much banking activity offering the best prospects of profitability, which can only attract a large number of global banking players.
What lessons to draw from these movements Three main:
-The increase of the own funds of banks is an answer, obviously, appropriate to the crisis. Need to pay attention to the calendar. Because meet the requirements in capital during the crisis, is to take the risk of further deceleration of credit. Moreover, the dynamic provisioning (or ex-ante), that the principle adopted by the g-20, goes in the right direction since it led the banks to make provisions when all goes well did not want to be when everything goes wrong. It must however take care well to calibrate the capital requirements for do not hamper the retail bank, which remains the main banking services for households and small and medium-sized enterprises.
-Industrial forces grow further consolidation in the sector. Conversely, the doctrine, fed by the current crisis, grows rather to the dismantling of a number of banking behemoths, to limit the scope of the "too big to fail" principle and limit the cases where the States would be obliged to intervene against systemic risks. A doctrine which adds to the argument of the size of the potential and not obvious separation of the activities of bank deposit and investment bank on the model of the US 1933 Glass-Steagall. Which of these two movements inverse will prevail The battle between the industrial dynamics and regulatory authorities will be harsh. In any event, should wish to contact information in Europe and the g-20 responses, both competitive pressures and the requirement of competitiveness will be strong.
-Finally, banking strategies pose formidable challenges to the monetary authorities. The pursuit of a policy of zero interest rates promotes risk taken without even lead to a restart of production credits. The challenge of the next few quarters will be out of a monetary configuration unsustainable term without breaking a still fragile global recovery.