Silver lining

[Dave Birch] I happened to be at an IT industry gathering with a question and answer session with someone from the British Bankers Association (BBA). It wasn’t about payments, directly, but about the legislative fallout from the current rash of bank debacles. The session concerned the government’s plans for something called the “The Financial Stability and Deposit Protection Bill” which went out for comment earlier in the year…

Banks have 12 weeks to persuade the Treasury to drop the idea or face a bill that investment bank UBS has estimated at up to £3bn a year for several years.

[From Banking reforms ‘to cost £3bn a year’ – Telegraph]

The government is proposing that deposits will be safeguarded up to some figure — maybe 50K or 100K for individual personal accounts and half a million or so for small business accounts — but we were discussing yesterday, a limit of £35K would cover almost all depositors (save for very rich people such as M.P.s). So, what has this got to do with payments?

Wise during the event

[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.

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