Josina Kamerling, head of regulatory outreach for CFA Institute (EMEA) | via CFA Institute The term shadow banking was coined in 2007 to describe parts of the financial intermediation process conducted outside of the commercial banking system.That is, the process of taking in funds from a depositor and then lending them out to a borrower. The term has somewhat pejorative connotations derived from the role played by shadow banking in the financial crisis (2008), including the proliferation of complex and opaque financing vehicles, poor loan origination practices and high system-wide leverage. However, there is growing recognition among policymakers as well as investors that a more transparent and safer shadow banking system can support the efficient functioning of capital markets and play a positive role in the financing of the economy. Indeed, alternative financing channels are likely to grow in importance in the years ahead if traditional bank lending remains constrained. Shadow … [Read more...] about Shadow banking: What role does the non-banking sector play in today’s markets?
Leveraged finance investment banking
Deutsche Bank has hit back after investors called for more cuts at the German lender’s failing investment banking division. Germany’s biggest lender responded to reports that several major shareholders had demanded cuts, particularly in the US, by defending its plans to turnaround the unit. Read more: Deutsche Bank returns to annual profit for first time since 2014 Investor concerns over the struggling investment bank division have grown in recent months as shares continue to hover around all-time lows. But the bank stood by its plans and said there was now a “good foundation for growth.” It said: “We have adjusted our footprint in our Corporate & Investment Bank and in the US already in 2018, including reducing our leverage exposure by more than €100bn (£88.2bn).” “We completed our adjustments ahead of schedule and now have a good foundation for growth.” The German banking giant’s return to annual profit in … [Read more...] about Deutsche Bank hits back over shareholder calls for cuts to investment banking division
The president of the World Bank, Jim Yong Kim, steps down on 1 February – three and a half years before the end of his term – in search of greener pastures. His readiness to resign from the leadership of one the two most powerful international institutions is a worrying omen. But it is also an important wake-up call. The World Bank and the IMF are the last remaining columns of the Bretton Woods edifice under which capitalism experienced its golden age in the 1950s and 1960s. While that system, and the fixed exchange rate regime it relied upon, bit the dust in 1971, the two institutions continued to support global finance along purely Atlanticist lines: with Europe’s establishment choosing the IMF’s managing director and the United States selecting the head of the World Bank. Kim, a career physician who presented himself as a champion of poverty alleviation, now leaves the fate of the bank’s leadership in the hands of Donald Trump – the global … [Read more...] about The World Bank and IMF are in crisis. It’s time to push a radical new vision
Yael Tamar is a blockchain strategist, storyteller, speaker, advisor and mentor. In 2017, after a decade-long tenure as a marketing executive and entrepreneur, Yael founded TopOfBlockchain, making sense of blockchain and crypto technologies, helping enterprises integrate blockchain as well as blockchain and crypto ventures educate the market, build the right business and economic models, as well as execute their go-to-market strategy. Yael will be a speaker at MindChain, one of Business Review’s flagship events of 2019 and the biggest event focused on blockchain and AI ever held in Romania, taking place on February 21-22 in Cluj-Napoca. Business Review talked to Yael to find out more about blockchain and the future of the technology. Why did you decide to start TopOfBlockchain and how has it been received by the market? This industry, like any emerging industry, is full of opportunities, but it’s still lacking the applicability and the connection to the … [Read more...] about BR INTERVIEW. Yael Tamar (MindChain Speaker): “Blockchain has the potential to save billions of dollars over traditional banking models”
Lauded as the start of a new revolution in banking, Open Banking was expected to take the financial world by storm when it was introduced almost a year ago to the day. The set of new rules require that the big banks allow their customers to share their own transaction data with third parties. Specifically designed to open up the market, the regulation is expected to drive innovation and competition by making it easier for financial and non-financial organisations to share and access customer data, or to make payments directly. The idea is that this will ultimately lead to better, more targeted products that provide a simpler user experience. However, last year, a survey by Which? revealed that 92 per cent of consumers had never even heard of it. In contrast to this, businesses are increasingly more aware of the benefits of Open Banking, and keen to use banking products that take advantage of the regulation. In recent research targeted at SMEs, it was discovered that that 87 per cent … [Read more...] about Are Britain’s banks close-minded to Open Banking?