The Great Financial Crisis has shattered public trust in banks in much of the Atlantic world. Excessively leveraged balance sheets, extreme compensation schemes, appalling risk-adjusted returns on equity, corporate misconduct and outright fraud have all contributed to undermining confidence. Extensive bank bashing by the public sector has further aggravated the situation. Re-establishing trust in banks will be a critical step on the difficult path back to economic prosperity. There will be no easy recipes. Collective efforts by the banking industry will likely be ineffective. Banks will have to show individually that they deserve regaining the trust of shareholders, counterparties, regulators and the body politic. This will require a constructive dialogue with the public sector, swift implementation of the Basle lll regulatory reform agenda, steady progress in alleviating the Too-Big-To-Fail problem and, crucially, far-reaching changes to the business model in an effort to return the banking industry to a role that genuinely serves the real economy. For a variety of reasons, confidence in Asian banks has not been damaged anywhere near to the same extent. The banking sector in Asia therefore an opportunity to become a relevant and instructive voice in the difficult but imperative exercise of rebuilding trust.
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Dr. Philipp M. Hildebrand, Senior Visiting Fellow, Blavatnik School of Government, Oxford University; Former Governor, Swiss National Bank
- Monday, 17 September 2012
- 5.15 p.m. - 6.30 p.m.
Auditorium, Level 3, Block B, Faculty of Law,
NUS Bukit Timah Campus
469G Bukit Timah Road
Multimedia: Webcast |