Bank Capital should be 13 pct - Basel Committee

The problem with defining the appropriate level of capital that banks should hold on their balance sheet is that in a general panic no amount of capital is adequate to deal with a bank run. For many decades banks could get by with wafer-thin margins of safety as generally confidence in the integrity of the banking system was high. Tinkering with capital requirements may be but one step in the right direction. Banking reform needs additional measures to be successful.

Image Campaigns - do they make sense for Banks?

Both Credit Suisse and UBS have recently launched advertising campaigns that are aimed to bolster their brand image. But does the sponsoring of Formula One really help UBS to reclaim lost ground with the high networth clientele that must surely be the main target for its marketing efforts? 
Image Campaigns may well have a role to play for banks that are active in the mass market but for banks that are mainly involved in the institutional or high networth market a more focused approach must be the preferred route. 

 
 

Who should regulators be accountable to?

The complaint by financial sector trade bodies about proposed changes to the UK's regulatory system raises the interesting question about the accountability - or lack thereof - of the financial regulators.  UK banks fear that the scrapping of the Financial Services Authority (FSA) will leave power in the hands of a small, unelected group. But can one really say that the FSA was accountable just because it was required to hold an annual public meeting and had to hold regular meetings with senior industry managers through its so-called Practioners' Panel? We wonder what the outcome of the Credit Crunch would have been if the regulators would have been subject to full democratic control during the past few years. If anything the reaction to the crisis would have been less decisive and therefore less effective. Democratic control would better be applied during the stage in the legislative process when the framework for the regulatory regime is designed and there is time for more - and more broadly based - discussion between all parties involved. That would allow the voice of taxpayers and consumers to have more weight in the ultimate outcome.