[Dave Birch] The CSFI has just published its Banking Banana Skins
survey. This a survey they conduct from time to time. It involves talking to bankers, regulators and observers (eg, consultants, analysts etc) to find out what should be keeping bank bosses awake at night. The no. 1 risk this year is “Liquidity” (which, incidentally, didn’t even make it into the top 30 last time) followed by “Credit Risk”. As I know nothing about banking, I can’t comment except to note that these seem like reasonable choices for the top two places. So why was I reading it.? Well, I always like to look and see where payment systems are in the list. After all, they’re what keeps me awake at night (some of the time) and I’m curious to see if the bankers share my obsession. Well, the headline is that whereas payment systems were 29th in 2006, they have moved up two places and are now 27th, so we can expect more management attention (and resources?) in the future. Not at lot more — the resource allocation does not follow the risk curve, but the risk/reward curve — but more.
It puts a spring in my step to know that tomorrow I’m going to see bank to pitch for some work in their 27th most important area of concern. Oh well.
There’s one other finding that I can’t resist pointing out. Both regulators and observers put “management incentives” (ie, bankers’ pay) in the top 10 risks list. Oddly, bankers didn’t. There’s an article in this month’s Financial World called “Making hay with pay” which is about the ten reasons why bankers’ pay has not been aligned with the interest of shareholders. Personally, I blame the shareholders, not the bankers (I hope they’re reading this).
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]