Market turmoil is the dominant subject in the Spectator’s weekly look at financial matters. Incidentally today’s Sunday Telegraph also contained an interview with Peter Smith the American boss of the Uk’s largest digital coin exchange Blockchain .com. who bemoans the lack of innovation in NFT’s by the FTA that some European exchanges seem to be involved in. Martin tales the view that the volatility shown by various Crypto currencies is a function of the fact that Crypto has become mainstream in most fund management portfolios and are therefore subject to the same nervousness as other asset classes in troubled times. As far as I am concerned it is not up to financial regulators to save anybody from themselves and their fear of missing out. However he does mention some home truths concerning margin calls and the fact that Bitcoin has “no intrinsic value whatsoever”. Bankers who actually lend money understand this only too well. That is why you can leverage your portfolio much higher in the FX and equities market than you will ever be able to do with Bitcoin.
Reuters reports that there seems no end in sight for investor pain in the seemingly never ending torrent of negative stories cascading from Credit Suisse. A CS executive was recently quoted as saying that” risk management is the very core of (the banks) DNA”. Some sceptics would say that a bank that had to fire both it’s head of risk and head of investment banking following massive credit losses within the last year should avoid such hyperbole. The Daily Telegraph points out that even the routine re-appointment of vice-chairman Severin Schwan is meeting with resistance from some shareholders. The main problem seems to be linked with the fact that Schwan has been on CS’s board since 2014. Schwan also heads up Pharma giant Roche a very secretive company indeed. Proxy advisor Ethos was apparently very critical of the banks decision not to publish an internal report on the Greensill affair. Why? Is there something to hide? Discretion is all in the Swiss Banking world but this decision is surely indefensible. Sunlight is surely the best disinfectant.
Another familiar story around the cost cutting banking majors in the UK which is bound to provoke the usual response from disenfranchised clients not able to cope with the DIY banking available from apps or want to continue to deal in cash. I am ambivalent on this subject as I can see both sides of the story. Regulators have increased costs and interest rate setters have reduced rates to near zero. We can’t make any money say the banks so we have to reduce costs and reducing real estate and staff is a good move for us. Fair enough I suppose but I can’t help thinking that the banks and building societies could have been a bit more innovative in serving their physical customers. Co-operation rather than competition might have been more appropriate in some cases. Mobile facilities could be introduced for far flung areas. Some part of Suffolk where I live are more or less bank free zones and more importantly not blessed with 21st century communications technology.
Howard Tolman is a well-known banker, technologist and entrepreneur in London,We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.For context on Alt Lending please read the Interview with Howard Tolman about the future of Alt Lending and read articles tagged Alt Lending in our archives.
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