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I am former editor of The Banker, a Financial Times publication. I joined the publication in August 2015 as transaction banking and technology editor, was promoted to deputy editor in September 2016 and then to managing editor in April 2019. The crowning glory was my appointment as editor in March 2021, the first female editor in the publication's history. Previously I was features editor at Profit&Loss, editorial director of Treasury Today and editor of gtnews.com. I also worked on Banking Technology, Computer Weekly and IBM Computer Today. I have a BSc from the University of Victoria, Canada.

Friday 23 October 2009

One Year On... Out of Intensive Care, but Still in Hospital

14 September 2009

A year after Sibos 2008 coincided with the dramatic collapse of Lehmans, there was a lot to take stock of on the opening day of Sibos 2009.

With every media publication and news channel running retrospectives of what went wrong with Lehman Brothers one year ago, the mood at SWIFT’s annual conference was subdued but somewhat optimistic. Many believe that the global recession has hit bottom and things are beginning to get better, particularly in Asia, but no one has been rash enough to say that the world financial system has completely 'healed'.

In the first ‘Big Debate’ plenary session, entitled “Sibos One Year on: Leading Through Uncertainty”, Peter Sands, group executive, Standard Chartered, spoke about three issues that were still outstanding and needed to be addressed: the scale of the imbalances in the global markets; the governments’ exit strategies from this quagmire; and the regulatory architecture needed to move forward. “Healed - no. Out of intensive care, but still in the hospital,” was his assessment of the present situation.

Ronnie Chan, chairman, Hang Lung Properties, was more sceptical. He believes that not only is the financial system not healthy yet, but “we haven’t even gone to see the doctor”, meaning that the underlying problems haven’t been identified, let alone addressed, and because of that he fears that the crisis will return again.

William White, chief of the economic and development review committee, the Organisation for Economic Co-operation and Development (OECD), said that there has been an incredible inventiveness by central banks, etc, to normalise the situation, but “we haven’t made it back to normal. Is the worst behind us? Clearly no one knows how big this is,” he said, explaining that as the financial side of the equation hits the “real”, or manufacturing, side, the downturn in the real side will also take its toll on the financial side, effectively generating a vicious cycle.

During the session, the banks were heavily criticised. White made the point that before the crisis, many people were worried that banks were too big and complex - and now they are even bigger and more complex. He said the current concerns are that the big banks which are supported by governments will turn into zombie banks and stifle innovative new products; or just the opposite: as governments pull out the stops to keep them afloat, these banks become more cavalier and credit standards will reach a new low.

All panellists agreed that the jury was still out as to how long the recovery was going to take. With debt to GDP rations doubling over the next few years for many countries, the question still remains: how we will get through?

Asia Focus
This year in Hong Kong, Sibos has attracted 5335 participants, 37% of which are from Asia. Although this is a 33% drop from the conference in Vienna last year, which saw 8114 attendees registered, the importance of the Asian representation was highlighted in the opening session.

In his keynote speech, Joseph Yam, chief executive, Hong Kong Monetary Authority, recalled the last time Sibos was in Hong Kong in 1991. He remarked on the significant developments, not just in Hong Kong but across the region, over the past 18 years. He identified four challenging issues that are present in the region, but not limited to it: the conflict between private financial intermediaries and public interest; the dilemma experienced by the emerging markets in terms of market openness and financial stability; the reality of no market being perfect; and the tension created by authorities’ involvement in the financial system. He said that the primary purpose of the financial system is financial intermediation that promotes financial development.

But while Sibos delegates were being buffeted by a Level 8 typhoon, Koppu, in Asia the financial tsunami seems to have died down somewhat. In a video interview with gtnews, Patrick de Courcy, head, markets & solutions, Asia-Pacific, SWIFT, pointed to the positive signs emanating from Asia. “ While Asia definitely hasn’t been immune to the crisis, what we have seen exports taking a hard hit and several countries go into recession. What we are seeing seems to point to a faster and stronger recovery from the recession. The IMF has revised GDP growth forecasts for India and China - close to 6% for India and 7.5% for China - and what we are seeing in SWIFT statistics, which are a good indicator of global economic and financial activity points to the same. In the second quarter this year versus the first quarter, we have had a 10% growth in Asia. That figure was 5% in the Americas and 3% in Europe,” he said.

However, Chan said that money flowing into Asia made it look a bit better than the West, but it is still not great, pointing to the recent US tyre tariff that will be highly damaging to China’s tyre industry. He also debunked the idea that China is soon set to become the world’s economic locomotive. The fiscal stimuli may not be working as well as many believed: most of the money in China’s fiscal stimulus package has gone into infrastructure investments, even though the Chinese government has told the banks to lend to corporates. “Banks have had a hard time pushing money out to manufacturing because production has been cut, therefore much of the money goes into the financial markets instead,” he said. Also domestic consumption has not increased dramatically: “You can’t change a culture that sees frugality as a virtue in three months,” he added.

First published on www.gtnews.com 

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