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.
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.
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.
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.
The credit crunch isn’t over yet. We asked people in the P.C. Hooftstraat in Amsterdam what they think about banks and how they see the future.
What do they think about an IKEA mortgage, a GUCCI or PORSCHE bank. ULURU has set out to rethink the way we bank. It’s time you design your own bank. Please watch our movie below.
Column Mick Walvisch
Can you combine Managing Risks with innovative entrepreneurship?
Just recently we heard the Dutch government repeating its ambition that Holland should become a leader in innovation and entrepreneurship.
The Dutch Innovation Platform, lead by our PM and renowned statesmen and business men, has really urged our nation to actively get involved in developing opportunities to improve our economic position in the world.
As the author of this piece and entrepeneur at heart I am well aware that I have a stake in the matter. But that does not withhold me from sharing my thoughts with you. I simply don’t understand why modern companies are not putting enough effort into redesigning their business and creating value, especially in this time and age…
What can a bank do to avoid bankruptcy? For one, they can pay more attention to their risk managers and take warnings about high-risk investments more seriously.
Bank managers agree, according to a recent survey performed by KPMG, a Dutch firm offering audit, tax and advisory services. In their survey, KPMG questioned 500 bank managers.
As much as 75% admit that banks consider risk management to be a supporting function, and fail to make it a structural part of the decision making process. 45% of the interviewees state that the board does not have sufficient knowledge of risk management. What do they feel needs to be changed? 60% say risk managers should have a bigger influence on corporate strategy. 75% say that the banking sector needs stricter rules.
Can complementary currencies – used in conjunction with the established monetary system – help us recover from the credit crisis and prevent economic downfall in the future?
Yes, says the Belgian monetary thinker Bernhard Lietaer. A system without interest, as an addition to our current system, can save us. Litaer challenges the monopolistic position of the current monetary system in many of his talks, books and interviews.
Informing the right employees about possible problems, so they can contribute solutions, helps companies survive the credit crunch. Says Trude Maas in the monday issue of the Dutch newspaper het Financieel Dagblad.
Maas is business columnist for het Financieel Dagblad and former senator of the Dutch Labour Party (PvdA). She is also chairwoman of the board of directors of Philips, and member of the boards of amongst others ABN AMRO and Amsterdam Schiphol Airport.
“Fewer expenses, more revenue. We know the mantra by now. The importance of added value, however, is mentioned considerably less often”, Maas says.
The nationalization of banks can boost the economy. Why?
Amongst others, because nationalized banks are more likely to give credit to consumers and businesses, says Flemish economist Paul de Grauwe in a recent article in the Dutch edition of Metro.
Dutch socialist politician Ewout Irrgang, an advocate for the nationalization of banks, agrees with de Grauwe. He adds that it is easier for the government to support banks that are in financial trouble when they are nationalized because they get full control. Irrgang does not believe in financial injections without a solid commitment. When a bank is nationalized, there is a return of investment. The government gets a share in a company that will likely yield a profit in the future.
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