11/02/2009

'The transformation of the banking business'. Presentation by José Luis Escrivá

In the wake of the crisis, financial markets will be different to those of the last decade. This could be an advantage for banks that have diversified funding.

Bank profitability depends on the economic climate, which will be weak in developed countries and vigorous markets, where there is major banking potential. This could be an advantage for universal banks that are present in emerging markets.

The future banking business will depend on how we manage bank restructuring, because we must use the crisis to reduce capacity and generate competition.

The risk of self-complacency must be avoided, because the situation is far from being back to normal.

The banking system wil be facing up to stricter regulations, which could affect the business profitability and particularly penalize models such as investment banking.

Out of this debate over regulations arises the dilemma of whether priority should be given to preventing banks from falling or minimizing the costs of he fall.