Can banks win back our sympathy if they apologize for the financial crisis they helped create with their shady credit schemes? Can they win back our goodwill, and rebuild our trust in a bright future?
The reason we’re asking is because recently a number of American and British bankers have admitted their mistakes and apologized, followed by some Dutch bankers.
Innovation has become a swear word in the financial world. It was a desire for innovation that led to the ever more complex financial products that caused the downfall of our economy. But is this bad reputation justified? Should we avoid innovation, to recover from this crisis?
Can a test help stabilize the financial sector? The Obama administration seems to think so. They have introduced a stress test for US banks.
This test should determine how much capital a bank needs to survive a further deterioration of the economic situation. Amongst others, an assessment will be made of the amount of losses banks would incur in a worst case scenario of increasing unemployment, decreasing property values and a shrinking economy.
The nineteen largest US banks will be submitted to this stress test, the results of which will be published by the end of the month.
What to think of allowing your child the freedom of online shopping without having to hand over your credit card? BillMyParents makes it possible for children to shop without actually giving them access to your credit card number, and allowing you to accept or decline every purchase.
How does BillMyParents work? A child selects the products it wants to buy at one of the online retailers that are connected to the BillMyParents network. A notification is then sent to the parent, after which they can approve the purchase and pay for it using their credit card.
This way, the parents can control which purchases are made, how much money is spent and even how many purchase requests are made.
A new way of Banking that is growing in popularity in especially developing countries is mobile banking. People can simply transfer money using their mobile phone to their friends and family. The advantages are numerous, but most importantly:
· You don’t need a bank account
· Costs of money transfer are lower
· No queuing for bank offices anymore
· No need for bank cards anymore
· It’s safe and secure
Again an example how innovations in developing countries can leap-frog our western way of banking. How does it work in reality? Check this video of M Pesa in Kenya:
This week, the Dutch Adviescommissie Toekomst Banken (Advising Committee for the Future of Banking) presented their findings in a report to the Nederlandse Vereniging van Banken (NVB – Netherlands Bankers’ Association).
The NVB founded the independent committee in November 2008 to examine what lessons could be learned from the credit crisis and to compose a list of recommendations.
The bonuses offered to the top managers of large banks have lately come under great criticism. Still, the managers working for a number of American banks have no need to worry. Why? Because the decrease in bonuses is compensated with an increase in salary.
This new reward system appears to be a response to a bill that was recently passed by the US House of Representatives, which would allow bonuses to be taxed up to 90%. The new law applies to high-level managers working at companies that have received over 5 billion dollars of government support.
As we reported in an earlier article, the economical crisis has underlined the importance of risk management. It has become apparent that existing risk models no longer apply and various financial constructions need to be re-assessed.
The Amsterdam Institute of Finance (AIF), together with the New York University Stern School of Business, have aptly responded to this situation by offering a new Executive Master of Science in Risk Management.
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