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LONDON, Oct 16 (Reuters) - The British Bankers' Association(BBA), the lobby group for more than 240 UK and overseas firms,held its annual conference on Thursday, attended by politicians,regulators and bank executives and other staff.
Here are selected comments from the conference:
JOSE VINALS, IMF DIRECTOR MONETARY AND CAPITAL MARKETS:
"The global economic recovery is really mediocre and subjectto downgrade risk.
"There are many markets where assets are now slightlyoverpriced. You don't find anything that's grossly out of line,grossly super-valued or overvalued but you see many littlediscrepancies across many markets regarding valuations."
"Banks now face a low profitability problem in many parts ofthe world... that is the price of safety.
"The crisis has led to an environment that is vastlydifferent to what we had before the crisis and banks arestruggling to adapt their business models to the post-marketrealities."
He said an IMF study of 300 of the largest banks showed onlyabout 60 percent had a structure that was able to make areasonable rate of return to be able to build capital andsupport new lending. He said only about 30 percent of eurozonebanks could meet that requirement, compared to about 80 percentin the United States.
"In those cases where there are banks that need to exitbecause the field is too crowded, I'm thinking of continentalEurope, then supervisors and authorities ... need to facilitatethe exit of those institutions, because those banks should notbe there."
JON CUNLIFFE, BANK OF ENGLAND DEPUTY GOVERNOR:
"Financial globalisation has clearly been rolled back sincethe crisis, some of it because of risk aversion and some of itbecause of regulation.
"A key determinant (on whether this will continue) iswhether the global reinforced governance machinery can now pivotfrom the design of new international regulatory standards toimplementation. Can it ensure there is consistent implementationacross jurisdictions?"
He said if regulators can't do that, there could be"regulatory arbitrage and a race to the bottom" or regulators will ring-fence operations and "build walls around institions."
"(Solving) Too big to fail is the most difficult part of theglobal agenda. We can all cooperate when things are going well,but when you have an institution that is cross-border andfailing, then the tendency is to behave less well."
"There has been a change since the crisis and supervision isnow more active, more intrusive in the business affairs of abank and I think the business models of banks is relevant tosupervisors.
"I think it is within the ambit of supervision to say wewant to see their business model works and if not (to ask),'what do you propose to do about it?'"
ROSS McEWAN, CEO ROYAL BANK OF SCOTLAND
"The days when global domination mattered more to RBS thanbasic customer service are well and truly over.
"None of us have yet found a way to grapple with the greatweight on our reputation - the way we pay our employees.
"More work is needed to challenge the bonus culture that hasdone such great damage to the image and conduct of retail andcommercial banking in the UK.
"It would be nice to get a coordinated forex settlement butwe'll wait and see what actually comes out of it.
"I'm confident that our plans that we put in place lastNovember and February this year will see us through to get tothe (capital) targets that we need.
"While the combination of falling unemployment and fallinginflation makes calling the timing of any increase in the baserate very difficult, we know it is something very much on theminds of our customers.
"We know that our mortgage customers are concerned that theymight not be able to balance their household budgets when theday comes, even if that is some time well into the future.
"I am signaling to our customers that in the months ahead wewill listen to your concerns. We want to talk to you about thestate of your finances."
MARISA LAGO, U.S. TREASURY ASST SECRETARY FOR INTERNATIONALMARKETS:
"I don't hold out the hope that we are going to haveabsolute global harmonisation, we come from too many differenttraditions, too many different legal systems.
"Setting harmonisation as the goal sets us up to failure.What we should be looking at is outcomes-based equivalents. Ifwe set that as the target we have a good chance of gettingthere."
CATHY JAMIESON, OPPOSITION LABOUR PARTY SHADOW FINANCIALSECRETARY TO TREASURY:
"There has been a lot of pressure put on banking by thepoliticians of all parties, but that is because of the problemsthat were there and emerged. If there was wrongdoing people haveto take the consequences of that. The scale of fines is for theregulators.
"Those fines will be avoided in the future by people inbanking taking responsibility, changing the culture and doingbusiness differently, and also for us politicians to ensure thatthere is a tight regulatory structure there."
ANTHONY BROWNE, BBA CHAIRMAN:
"We also need to change how bank staff work today - bychanging the culture of banking. Because true change can onlycome from within. This is essential if we are to win back thetrust and confidence of our customers.
"Much of the action taken since the crisis has been good.But some of it has had unwelcome unintended consequences, suchas the fragmentation of the global banking system, thebalkanization of capital and liquidity and the differing,sometimes conflicting regulatory regimes across the world."
"Fast forward 20 years and ... everyone will have their veryown bank branch in their pocket. This means banking will beeasier than ever for all of us. But it will also present hugechallenges for the banks we work for. As big global brands suchas Apple, Google and Amazon shake up and disrupt the market inunpredictable but exciting ways. The way that banks interactwith their customers in the future will change hugely." (Compiled by Steve Slater, Matt Scuffham and Huw Jones)
