Tag Archives: economy

Why Banks Are Still In Trouble, How They Must Change

Address to the City Book Fair in London by Jonathan Ledwidge.

Clearing The Bull (Part 1) – Ending 30 Years Of Banking Failures  What banks must first do to stop repeating their history of failure.

Clearing The Bull (Part 2) – Why Banks Are Still In Trouble                   The moment of clarity banks need if they are to make real progress.

Clearing The Bull (Part 3) – How Banks Must Change                              An insider’s view on making the banking industry more human and more competitively and economically sustainable.

Jonathan Ledwidge is the author of the book Clearing The Bull: The Financial Crisis And Why Banks Need A Human Transformation.

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Clearing The Bull Part 3 – Why Banks Need A Human Transformation

Banker and author Jonathan Ledwidge addresses the City Book Fair in London and providers an insider’s view on why banks must make a human transformation as well as the specifics on how they can achieve it.

Watch Part 3 on youtube using this link http://youtu.be/L99b0ZZsUbc

and

Watch Part 2 – Why Banks Are Still In Trouble on youtube with this link http://youtu.be/cnsCbMuWYQc

Watch Part 1 – Ending 30 Years Of Banking Failure on youtube with this link http://youtu.be/evrheDydfto

Clearing The Bull Part 2 – Why Banks Are Still In Trouble

Banker and author Jonathan Ledwidge addresses the City Book Fair in London on why, despite changes made since the financial crisis, banks are still in trouble and are likely to remain in trouble for the foreseeable future.

Watch Part 2 on youtube using this link http://youtu.be/cnsCbMuWYQc

and

Watch Part 1 – Ending 30 Years Of Banking Failure on youtube with this link http://youtu.be/evrheDydfto

Watch Part 3 – Why Banks Need A Human Transformation on youtube with this link http://youtu.be/L99b0ZZsUbc

Clearing The Bull Part 1 – Ending 30 Years Of Banking Failures

Banker and author Jonathan Ledwidge addresses the City Book Fair in London, on what the banking industry must first do if they are to bring and an end 30 years of repeated failures.

Watch Part 1 on youtube using this link http://youtu.be/evrheDydfto

and

Watch Part 2 – Why Banks Are Still In Trouble on youtube with this link http://youtu.be/cnsCbMuWYQc

Watch Part 3 – Why Banks Need A Human Transformation on youtube with this link http://youtu.be/L99b0ZZsUbc

HSBC A Prime Example Of Why TBTF Means TBTM (Too Big To Manage)

In an earlier series of articles (Parts I, II and III can be found at the respective links) this blog set out the specific reasons why TBTF means TBTM. The troubles of HSBC in the US are a prime example of this maxim.

HSBC has been on a mission to be the “World’s Local Bank” and that sentiment is very proudly and profoundly expressed in its adverts—which by the way are very good. It is a pity that the same cannot be said for the bank.

In trying to achieve its global ambitions HSBC has had many missteps. In 2011, a subsidiary of HSBC was fined millions for selling products that had a minimum period of investment that was beyond the life expectancy of the pensioners they were sold to. The fact that the mis-selling went on for five whole years, from 2005 when HSBC acquired the company to 2010, speaks volumes about the bank’s ability to manage its affairs.

As distasteful as this was it pales in comparison to other HSBC missteps. In 2003 HSBC acquired the American subprime lender Household International. Phillip Inman of The Guardian wrote in an article entitled HSBC counts the cost of US housing market collapse:

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9 Point Plan For Transforming The Banking Industry

The banking industry needs to be transformed in order to save it from itself. Despite the protestations of governments, regulators, public and the media that change can only come from within (spare us another thousand useless regulations). Here is how it should be done.

Another banking scandal, another inquiry, another band-aid and so we will continue until the next scandal, another inquiry and another band-aid. It is a depressingly familiar sequence of events.

The problem is that while governments, politicians and regulators are beginning to realize that transforming banks is about values and culture they still believe that that transformation can be legislated and/or regulated.

This blog has stated several times that transforming the industry can only be accomplished from within and that it must recognize the human issues and behaviors involved. The plan below consists of a series of assertions, 9 in total, as well as the rationale for these assertions.

The proposed transformation is comprehensive in that it covers every aspect of the human ecosystem within which banks operate; managers, employees, customers, suppliers and the wider community, the environment within which they operate and the behaviors which motivate them.

This is why the transformation is described as a human transformation and the transformed entity is known as The Human Asset Bank. This is what banks must do and preferably sooner rather than later.

The Human Asset Bank

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What We Learned From The Bob Diamond Testimony

Bob Diamond appeared before the Treasury Select Committee of the British Parliament today. While some MPs had more than a reasonable banking knowledge and asked some good questions, both sides came up short. Here is why along with some general observations.

Where MPs Came Up Short

MPs still suffer from derivatives derangement syndrome and a total misunderstanding of investment banking. Diamond had to remind MP Pat McFadden that Halifax, HBOS, Alliance & Leicester and Northern Rock all collapsed and they had nothing to do with derivatives and the riskiness of investment banking.

Following on from the above, it appears that MPs, along with the rest of the population do not realize that loans involve risk taking and that losses do not only come from derivatives or “casino” banking—a most unbelievable notion. Until MPs and regulators fully understand the dimensions of risk they should forego any decision to change the structure of the industry. Continue reading