Old Mutual said the discussions centre on the sale of a 70 per cent stake in Nedbank. Shares in Old Mutual closed up 3.9p at 124.9p while HSBC shares rose 5p at 639.2p.

Old Mutual said the proposed sale, if agreed and approved by regulators and shareholders, would be a major step in its strategy to simplify its business.

The sale “is likely to result in a material strengthening of South Africa’s financial sector, foreign direct investment by HSBC in the banking sector and material incremental investment by Old Mutual in the long-term savings sector”, Old Mutual said in an announcement to the London Stock Exchange.

Ian Gordon, analyst at Exane BNP Paribas, said regulatory clearance of such a deal is not certain although South Africa has no rules prohibiting foreign companies from acquiring a stake of this size.

“Barclays was limited to 53.96 per cent of ABSA in 1985, (Chinese bank) ICBC acquired only 20 per cent of Standard Bank in 2007, and recent indications have suggested limited appetite to permit further majority acquisitions by International banks,” Gordon said. “So this is not yet a done deal.”

Original article by Victoria Thomson. Republished with kind permission from Scotsman.com

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Permanent salaries

Starting salaries awarded to successful candidates placed in permanent jobs rose for a ninth consecutive month in July. Moreover, the rate of inflation accelerated to the strongest since February 2008. Just under 17% of panellists reported an increase in salaries during the latest survey period, which they attributed to stronger demand for permanent staff and shortages of quality candidates.

Copies of the full report are available on annual subscription from Markit. For subscription details please contact: economics@markit.com Tel: +44 1491 461000

Re-published with kind permission of Markit

Last month I set out the secret to selling more invoice finance, by giving customers what they say they want. This month I thought it would be interesting to estimate the size of the potential prize to the UK invoice finance industry, in terms of market growth, if some of those issues were addressed. Therefore I have estimated the number of UK businesses that are potentially eligible for invoice finance.

According to statistics from BIS (The Department for Business Innovation & Skills), there were 4.8 million private enterprises in the UK at the beginning of 2008 (excluding the not for profit sector).

A well known data warehouse currently records almost 3.4 million of these businesses on their database which represents approximately 71% of the total population of businesses.

From that database I selected only those businesses that are categorised as being within industry sectors that are likely to be eligible for some form of invoice finance e.g. recruitment businesses, manufacturing etc. This yielded a total of just over 880,000 businesses.

I then applied a size criterion and excluded any businesses turning over less than £200,000 per annum. This reduced the number of potentially eligible businesses to c. 291,000.

There are a further c. 142,000 businesses, within those eligible industry sectors, that have annual turnovers of between £100,000 and £200,000 per annum. Including these would increase the total target market for invoice finance to 433,000 UK businesses.

According to recent statistics from the ABFA, at the end of Q1 2010 their members were servicing 41,275 existing factoring & invoice discounting clients.

These existing clients represent just 9.5% of the potential target market for invoice finance, and c.0.9% of the total number of businesses in the UK. Even accounting for the clients of non ABFA members and striking out a proportion of the target market that may not be suitable for other reasons, the market share of the invoice finance companies is still small.

The potential prize to the invoice finance industry is the possibility of substantial growth in client numbers for those invoice finance companies that are bold enough to address some of the issues that I highlighted in my previous article, The Secret To Selling More Invoice Finance.

Glenn Blackman MBA MCIM writes regarding invoice finance and related matters at www.glennblackman.co.uk. Glenn is also the Managing Director of Cashflow Acceleration Limited, a specialist invoice finance brokerage.

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Just 8 months out of bankruptcy protection, American lender CIT has posted stronger-than-expected Q2 profits of $142.1 million, on $1 billion worth of new business.

It has secured 2.5bn of new funding globally since January, including an unprecedented £100 million facility reserved for UK vendor finance, as well as repaying nearly two thirds of its high-priority debt.

What all this means for its leasing competitors in Europe is that, if they weren’t figuring an active CIT in to their mental view of the market ahead, they should be doing so now.

Back in the game

Speaking exclusively to Leasing Life, the company’s global head of Vendor Finance, Ron Arrington, said that CIT was “aggressively out in the market”, with a view to increasing business.

Arrington has good reason to be bullish – his vendor finance division is occupying a more prominent position than ever within CIT, after 2009 saw the company sell or reorganised wide swathes of peripheral business in order to focus on its most profitable segments.

The total volume of VF business written during H1 2010 was down year-on-year in absolute terms, but occupied a significantly higher proportion of CIT’s total lend than it did a year earlier.

Furthermore, this prominence looks to increase – of $2.5 billion in funding secured so far this year, some $1.8 billion is earmarked specifically for Vendor Finance.

One particularly interesting component of this is a £100 million conduit facility closed in London and destined for the UK arm of the business, the first such facility that CIT has arranged outside North America.

For players in the UK IT vendor finance market, many of whom have been very busy in pushing into the gaps left by CIT’s recessionary troubles, this is a clear signal that their old rival is back in the game.

Getting the model working

There is still some way to go, however. For CIT, success has always meant borrowing money cheaply and lending it at a higher rate – a strategy that left it in such trouble when cheap capital vanished from the market in the aftermath of the credit crisis.

To get the model working again, CIT has two major challenges. The first is to gain access to new and inexpensive sources of liquidity, a cause which the healthy $2.5bn of credit facilities closed so far this year would seem to support.

Arrington says Vendor Finance has closed nearly $2 billion in funding facilities since the start of the year, adding “as we look to continue diversifying funding sources, liquidity is not under pressure.”

CIT’s second challenge – to reduce the cost of debt repayments in the aftermath of Chapter 1 – is also being tackled at a rate that has shocked many analysts.

Some 4.5 billion of the group’s first lien debt has now been paid back, comprising 60 percent of what CIT came into 2010 with. The balance, meanwhile, has been refinanced at a lower cost.

“The diversification of funding and the actions the company has taken to pay down our higher cost debt is helping the margins in our business” said Arrington.

In order to help repay debts, CIT has sold off just 5 per cent of its total balance sheet in the last year, including over $1 billion in corporate finance and student loan receivables and a joint venture with Canadian lender CIBC.

Also divested was CIT’s equipment finance business in Australia and New Zealand, a decision that Arrington said was made “to reduce exposure to the consumer lending market”.

More than just price

While CIT’s core funding model returns to health, CIT’s Vendor Finance division in Europe will concentrate on profitable sales aid leasing, primarily in the IT, Telecoms and Office equipment markets. 

Arrington commented that, while customer investment appetite remains “somewhat muted” in these sectors, the constant need for businesses to replace and upgrade high-tech assets had incurred a healthy level of demand for finance.

The relative health of these sectors poses its own challenge to CIT, however. Many UK and European lessors, also noticing the opportunities to be had in technology finance, have been prospecting the arena for vendor schemes of their own over the last two years. 

CIT will face stiff competition from these peers as it carves out a larger space in the market, but Arrington is confident of his division’s “strong value proposition” in Europe – despite the fact that it will still be limited in its capacity to drive down prices.

“Our value proposition goes beyond price” said Arrington, referring to a “best in class” service offering involving recently upgraded CRM systems, a strong level of contact with vendor partners, and high flexibility in supporting different resellers’ various routes to market.

Healthy Tension

In a sign of its increasing appetite, CIT last month began transacting business through a new vendor programme with fast-growing PC manufacturer Lenovo.

In addition to seeking out new relationships such as this, Arrington’s division will be turning its attention to “maximising business” within existing programmes – news that will be music to the ears of partnered resellers looking to achieve more finance sales.

Will it be difficult to balance reseller’s demands for greater conversion of finance proposals with the need to ensure healthy returns through selective credit control?

“In good times as well as bad,” says Arrington, “there is always a healthy tension between credit approval rates and new business volume. We will continue utilising our best in class credit scoring models, and also the expertise of our people – they know our resellers and their customers’ businesses really well and this helps ensure prudent lending.”

Overall, Arrington is optimistic that CIT’s reputation for global reach and service provision, together with the decisive steps it has taken towards redressing its financial situation, will give it what it needs to push ahead in a high-pressure IT finance market – “We will be a key player, and we will be a global player.”

Will CIT regain the place it occupied before the onset of the credit crisis? Arrington’s answer is simple – “ We’ve made tremendous progress so far”

Article contributed by Fred Crawley, Senior Reporter – Leasing Life & Motor Finance

VRL — Analysis, insight, intelligence

NBNK Investments – launched by Lloyd’s of London chairman Lord Levene and former City regulator Sir David Walker – plans to use the money to buy branches from existing banks, and hopes to make its first acquisition within 18 months.

The company is understood to be eyeing the 600 branches that Lloyds Banking Group is being forced to sell for receiving state aid – including Lloyds TSB branches in Scotland – as well as parts of nationalised bank Northern Rock.

It aims to build a network of between 400 and 600 branches across the UK, accounting for between 4 per cent and 6 per cent of the market.

NBNK – whose institutional backers include Aviva, F&C and Invesco – will initially focus on retail banking and banking services for small and medium sized companies, while it also plans to expand into wealth management over time.

It will not be active in areas such as wholesale, international or investment banking. Instead, it says it will focus on offering traditional, branch-based banking services, in which individual managers are able to make decisions. It plans to offer a full range of products, and internet and telephone banking services.

Lord John McFall, the former Labour chairman of the Treasury select committee and recently retired MP for West Dunbartonshire, will sit on the board, alongside former Tory Scottish secretary Lord Forsyth.

Charles McCreevy, Ireland’s former European Union commissioner, and barrister Lord Brennan are also directors.

Levene, NBNK’s chairman, said: “The investment community, the public and the regulators have welcomed the potential for an institution such as the one we propose.

“Admission (to the stock exchange] marks the completion of the first stage in our plans. We will now establish a dialogue with a number of sellers of assets which would fit our acquisition profile.”

Levene is due to leave Lloyd’s of London in December 2011. A spokesman said NBNK had agreed to reimburse Lloyd’s for any time Levene spent on bank business between and now and next year.

Until he leaves, Levene will not be paid a salary from NBNK but will instead receive 200,000 shares.

NBNK has not yet chosen a name for its bank. The investment company’s name represents an abbreviation of ‘New Bank’, but a company cannot use the word bank in its name if it does not have a banking licence.

NBNK Investments placed 50 million shares yesterday at 100p each.  The stock closed up 6.5p last night at 106.5p.

It is the latest in a string of groups to announce plans to launch a high street banking operation in the UK.

Earlier this year, Virgin Money acquired a banking licence through the acquisition of small regional private bank Church House Trust.

Metro Bank, backed by US billionaire Vernon Hill, opened its first branch in London last month.

The new banks are also likely to face competition from Tesco Bank, the financial services arm of the supermarket giant.

Original article by Peter Ranscombe. Republished with kind permission from Scotsman.com

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The net wealth of the UK declined 1.4 per cent to £6,669 billion last year, according to official figures. It was a lesser drop than the year before, when the country’s wealth fell 4.3 per cent, but what is more interesting is how that wealth is made up.

The majority of it, 61 per cent, is residential housing. That makes it immediately obvious how vulnerable the UK is to a fall in property valuations, which are sustained largely by the ability of households to borrow money.
 
Since 2007, some £265 billion has been wiped off the value of houses, and prices have just started to fall again.

Civil engineering works – roads, bridges and so forth – weigh in as the second biggest asset on the UK’s balance sheet. They’re worth £725 billion, more than a tenth of the UK’s net wealth and more valuable than our entire portfolio of intangible assets (software, patents, artistic works). So much for the knowledge economy.

Slice the data another way and other weaknesses of the UK’s economy are laid bare. Households are worth some £7,244 billion, more than the entire net wealth of the country. That is possible because other sectors are in the red: notably central government (worth a negative £395 billion) and financial corporations (minus £390 billion). Private, non-financial corporations knock another £323 billion off the UK’s worth, largely thanks to the liabilities of a handful of massive companies.

Despite the dips over the last two years, the UK has seen growth of 53 per cent in its net wealth since 2001. But more than three-quarters of that (76 per cent) is due to the residential property boom, which no-one now expects to be repeated any time soon.

All in all, these figures paint a picture of a country that is like a grand old stately home which has been remortgaged by its impecunious owners: outwardly impressive but hard to maintain in a decent state of repair.

It may be that in future some international equivalent of the National Trust will step in to preserve the UK as a historic curiosity, converting the Isle of Wight into an oversized gift shop. In the meantime, the new government must do all it can to encourage investment in businesses, not in bricks and mortar.

Article contributed by Nick Britton, Growth Business

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The Insolvency Group will provide members with a range of services including thought leadership, representation, and regulatory and technical support.

Members who join the group will gain access to a wide range of opportunities designed specifically to help them remain at the forefront of their field.

They will receive an email newsletter with regulatory updates, links to help sheets and news and views on issues affecting the insolvency profession.

In addition, they will have the opportunity to attend free seminars and other events to meet and exchange ideas, extend and refresh technical knowledge and hear from leading experts in insolvency.

The group will be chaired by Neville Kahn, global head of reorganisation services at Deloitte.

Speaking about his appointment, Neville Kahn said, “As the UK’s largest regulator of insolvency practitioners, ICAEW has the ability to act as a powerful advocate on issues affecting insolvency practitioners. I am delighted to lead this new group which will support and represent members in this field. Drawing on their collective experience, we will be able to shape the debate on issues affecting the sector to better support the next generation of insolvency practitioners.”

The new group will provide opportunities for information-sharing and will act as a focal point for the views of members. Members of the group will also have access to ICAEW’s online insolvency community, Talk Insolvency.

Michael Izza, chief executive of ICAEW, commented on the launch, “One of our strategic aims is to support members throughout their careers. As a provider of insolvency qualifications – through the new ICAEW Certificate in Insolvency – and a regulator of insolvency practitioners, we are well placed to support members at every stage in their career. The new Insolvency Group will provide an excellent platform to engage practitioners and deliver important services to those working in this area.”

The Insolvency Group is open to ICAEW members and non-members who are interested in insolvency. ICAEW insolvency licence holders will automatically become members at no extra cost. Members will be able to sign up for the group as part of their annual subscription renewal, or via the Insolvency Group’s website – icaew.com/insolvencygroup.

Despite now acknowledging that the big fiscal squeeze will cause massive public-sector job cuts, ministers expect the deficit reduction medicine to revive private-sector job creation so much that unemployment starts to fall almost immediately. Is this a realistic prospect, or naive optimism?

Optimists can point to employment forecasts from the recently established independent Office for Budget Responsibility (OBR). According to the OBR, the total number of people in work starts to rise next year (2011) and continues to rise through to 2015, resulting in a net gain in employment of 1.3 million between 2010 and 2015. Unemployment meanwhile peaks at 8.1 per cent in 2010 – just over 2.5 million – and then declines to 6.1 per cent (around 2 million) by 2015.

Given that the OBR’s forecast of net total employment growth of 1.3 million accounts for a net fall of 600,000 in public-sector employment, the forecast implies that the private sector will create 1.9 million jobs during the forecast period. This amounts to an average increase in private-sector employment of 1.6 per cent (roughly 380,000 jobs) per year.

Private-sector job creation of this magnitude would be a stretch but isn’t too far out of line with recent UK experience. The Thatcher jobs recovery in the 1980s, covering the period from the post-recession trough in employment through to the subsequent peak in employment in 1990, saw 2.97 million extra private-sector jobs created at an average rate of 2.1 per cent per year. The Major jobs recovery, following the early 1990s recession that, similar to now, coincided with a period of mass public-sector employment downsizing, saw 1.97 million extra private-sector jobs created at a rate of 1.7 per cent per year. The Blair-Brown era of job growth from 1997 and prior to the recession of 2008-9 saw 1.9 million extra private-sector jobs created, although at a relatively slow rate of 1 per cent per year.

Significantly, the faster periods of private-sector employment growth are associated with rapid rates of economic growth. What made the Thatcher jobs recovery so “jobs-rich” for the private sector was the impact of the inflationary Lawson boom in the late 1980s, which witnessed several years of unsustainably fast economic growth of above 4 per cent per annum. The pace of economic growth during the Major jobs recovery was slightly less frenetic but sadly equally unsustainable. The Blair-Brown years prior to the recession were by contrast somewhat quieter, with annual economic growth rates usually close to the 2.5 per cent consistent with mostly stable inflation. This was good for economic stability but meant a slower rate of private-sector job creation.

The key lesson to be drawn from this experience is that the UK economy needs to grow by at least 2.5 per cent per year in order to stimulate 1 per cent annual private-sector job growth. The OBR is forecasting faster growth than this in the next few years, so sees reasons to be cheerful. But the historical precedence suggests that economic growth in the next few years has only to be slightly weaker than the OBR’s forecast for the jobs outlook to appear a lot worse. Against the backdrop of massive public-sector job downsizing, it doesn’t require anything like a double-dip recession to result in a prolonged serious jobs deficit – merely economic growth in the range 2-2.5 per cent per annum rather than the above-trend growth rates the OBR expects.

Such a slightly weaker growth outcome – which many would actually consider a decent recovery given the various strong headwinds at present facing the UK economy – is easily as imaginable as the OBR’s central forecast.

The CIPD estimates that the rate of economic growth doesn’t hit 2.5 per cent until 2013, prior to which, against a backdrop of public-sector job cuts, private-sector job creation is too weak to prevent a net loss of 300,000 jobs to the economy as a whole. Stronger growth from 2013 then enables the economy to start adding jobs again with the level of employment by 2015 around 100,000 higher than in 2010. A welcome increase, but far less than the 1.3 million extra jobs the coalition government is hoping for.

In the CIPD scenario the unemployment rate rises from 8.1 per cent in 2010 to a peak of 9.5 per cent (2.95 million) in 2012, before falling to 8 per cent by 2015. This would leave unemployment still close to 2.5 million by 2015; meaning Britain faces at least half a decade of a prolonged serious jobs deficit. So will fiscal pain mean private-sector jobs gain? Yes, but probably not very much and certainly not any time soon.

Article contributed by John Philpott, Chief Economic Adviser, CIPD

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Angela Knight, chief executive of the British Bankers Association (BBA) believes that “the blame game has gone on far too long and the time has come for a more measured and serious debate”.

“The industry does not duck its responsibility,” she said, “but with the economic problems of some countries that have been present for many years, though masked, now being so obviously displayed, it is clear to all that whilst we are part of the problem – we are by no means all of it.”

Speaking to delegates at the BBA Annual International Conference, Knight stressed: “The banking industry is responsible for banking. It does not run the regulator, it is not in charge of monetary policy and it is not responsible for public spending.”

Add value

Stephen Green, HSBC Holdings group chairman, argued that it is imperative for banks to demonstrate the value they can add to the economy and to society. “We need to focus on the raison d’etre of business and to turn our backs on short-term shareholder maximisation. More urgently, in the short term it is clear that strong banks will be needed to support recovery.”

Green confirmed that “often in the last two years, banks have been seen as being unwilling to meet customer demands, with all the consequent effects on our reputation”.

Green particularly welcomes the Bank of England’s creation of a Financial Policy Committee and its role of managing the overall supply of credit. “I believe,” he said, “that the use of such mechanisms as varying the capital requirements in the banking system, or administrative measures such as loan-to-value caps in key sectors, will be vital to support sustainable economic growth and reduce the probability of a further crisis.”

Far-reaching enquiry

The UK government has asked the Banking Commission (Commission) to undertake a far reaching enquiry into financial regulation. Its remit is wider than expected and will look into the state of competition in the industry and how customers can be sure of the best deal.

Andrew Tyrie MP, chairman of the government Treasury Select Committee, argued that the Commission, for its conclusions to be credible, will need to examine thoroughly all the main ideas on regulatory reform affecting capital and liquidity currently being aired.

Green sounded a warning regarding bank regulation. “It is a difficult path to tread,” he stressed. “Government and regulators need to calibrate carefully the impact of the various banking reform measures on our fragile Western economies. It is essential to recognise that it will take time for many banks to adapt, rebuild and reshape their balance sheets to meet the demands of the ‘new normal’. This means making some delicate judgments about both details and implementation timing of Basel III and Capital Requirements Directive III and IV if we are to avoid choking recovery and plunging into a new credit crunch.”

Tyrie stressed: “Regulation itself is a formidable barrier to entry into the financial services industry. The current, and probably justifiable, intensification of regulation seems likely to raise the barrier even higher, unless strenuous efforts are also made to promote competition.”

Tyrie wondered whether it was the complexity of Basel II rules which served to nullify their value. “If so, Basel III needs a thorough examination too,” he said.

Message from the US

Louis Susman, the US Ambassador suggested that, given that the US has lost some $7tr in stock-market wealth and $6tr in its housing market during the recession, regulation was inevitable.

“The US,” he explained, “is on the verge of passing the most comprehensive financial regulation reforms we have seen since the 1930s. The reforms are not perfect but we can’t let perfect get in the way of good. Along with these reforms we are working in parallel with G20 governments and international institutions, such as the Financial Stability Board, the Basel Committee on Banking Supervision and the IMF to improve the entire financial system.”

The new bill (the House and Senate have completed the conference committee stage of the bill and its now time for the final vote in the Senate) will provide greater scrutiny of large financial firms to prevent any one company from threatening the entire financial system. “If a big firm is failing, regulators will have the ability to shut it down and break it apart in a safe and orderly way without asking taxpayers to pay a dime,” said Susman.

Swans into ugly ducklings

Gordon Nixon, president and chief executive of Royal Bank of Canada, expressed similar concerns about Basel III. He said: “Basel III’s proposed rules are supposed to be a starting point for discussion. Ironically, these proposed rules, for all their good intentions, will negatively impact even the healthiest bank’s balance sheets in terms of capital, leverage ratios and liquidity and compromise economic growth. The proposals are so complex and onerous that we run the risk of an agreement that lacks transparency and integrity, or one that results in non-uniform implementation.”

Nixon added: “It has re-defined capital and risk assets, the effect of which is to turn swans into ugly ducklings”.

Canadian banks, for example, would be lifted from their position as well capitalised, liquid financial institutions – and recast as undercapitalised. “Banks that passed the ‘real life’ stress test may fail the theoretical one – a pretty good indication of flawed methodology,” he said.

Competition and transparency

Andrew Tyrie told BBA Conference delegates:  “Concern about inadequate competition in retail banking is widespread. So today I can announce that the Treasury Select Committee will begin an examination of the issue – competition in retail banking as well as the future of so-called free banking.”

He added: “Lack of competition within financial services has been a long-standing concern of mine, pre-dating the recent financial crisis. Examining competition within the sector is now more crucial than ever. The complaints, some justified, simply don’t go away.”

Tyrie also suggested that large bank bonuses are probably a consequence of inadequate competition in investment banking.

Another crucial ingredient is greater transparency. “Regulators are often needed to protect customers whenever there are complex products, whether in manufacturing or the service sector. And a crucial weapon in their armoury can be sunlight. Transparency, rather than heaps of further detailed regulation, can often curb concentrations of power, vested interest and provide better outcomes for consumers.”

Future resolutions

As the economic storm subsides, Gordon Nixon believes that strong banks will get stronger and weak banks will be pressured to re-structure.

“This suggests an era of opportunity for potential acquisitions but not until we have a clear line of sight on the true value of assets and clarity on regulation,” he explained. “As long as uncertainty and volatility remain, finding the right time to buy at the right price is like trying to catch a falling knife – but ultimately our industry will re-structure.”

Nixon forecast: “Banks will have to re-structure their business mix to ensure that capital is being deployed in the most efficient manner because neither the marketplace, nor regulators, will tolerate marginal returns on excess capital. The result will be re-structuring of balance sheets and assets and those that can adapt will benefit and those that are complacent and hope for a return to the ‘good old days’ will atrophy.”

Return of securitisation

Deven Sharma, president of Standard & Poor’s argued that securitisation may return in the near future. “As things stand,” he said, “regulatory uncertainty is likely a major factor behind the dearth of securitisation internationally. In Europe, about €30bn of securitised bonds have been sold this year compared with more than €500bn before the crisis – and some 95% has gone to central banks, not the private sector.”

He added: “Nobody expects a return to the levels or complexity of securitisation that we saw before 2007. But the comatose state of securitisation leaves a big hole in the pool of financing available to financial institutions and their customers. That in turn has a real impact on activity and jobs in the wider economy.”

Initiatives are underway, Sharma confirmed, to support a healthy and sustainable securitisation market for the future. More information about asset pools is being made available to investors, as well as ratings firms, to help them take a more informed view of credit risk. Industry bodies such as the European Securitisation Forum are seeking to bring greater transparency through standardised data reporting. “New structures are less leveraged, simpler and easier to understand,” he said.

Future vision

Stephen Green stressed that a sound banking system was imperative for the economic recovery.

“But we will never achieve this,” he said, “unless we can change the perception that financial services is an industry which is preoccupied with serving itself and its own short-term advantage into one where our primary objective is to service the needs of the wider economy.”

He added: “We have considerable work to do on this. We need to continue to show that we understand that parts of our industry behaved very badly in the run up to the crisis. We need to demonstrate that we recognise our obligations to behave responsibly to manage and understand risk and to create the sustainable value that the economy and wider society needs.”

Ambassador Susman concluded: “As an ex-banker I take great pride in the contribution of the financial industry in the past to the wealth and growth of the world economies. I have also felt the pain of the abuses of the past, which created hardships for so many and, quite frankly, let to populist anger against the industry.”

“However, I look to the future with optimism in that we have learned from the past. I am confident that whatever laws and regulations are passed will be appropriate, reasonable and not punishing to the financial sector, so that the banking industry will be allowed to remain the strong engine that leads the world to growth and recovery. We must constantly remember to retain the political will and the courage to do what is right for our employees, shareholders and for the people and communities we serve.”

Article contributed by Edward Peck – Asset Finance Europe

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