Attendees, speakers on day one of conference say coming regulations will continue to cause uncertainty.
There was a cautious tone to the first day of the annual EuroFinance International Cash and Treasury Management Conference this week in Geneva, Switzerland. One of the primary themes revolved around the impact of regulations like the US Dodd-Frank Act, and similar regs yet to be enacted by Europe regulators and with Basel III.
Daniel Franklin, executive editor of the Economist, started off the proceedings by pronouncing that the main risk going into 2011 is policy risk: it is a delicate balance to strike to stoke demand in the economy, but the “coordinated austerity” measures in several countries at the same time could tip the world into a double-dip recession scenario.
With the backdrop of low-growth economies getting ever more regulated, bankers at the conference were asked what they thought would be the most significant impact of this move to regulate financial players and markets. Marilyn Spearing, global head of Trade Finance and Cash Management, Corporates at Deutsche Bank, noted that the enacted regulation (Dodd-Frank) – still with so many rules yet to be finalized – as well as the long implementation period of Basel III – were major sources of uncertainty. Ultimately, she said, this caused banks to wonder what kind of business model they would be able to sustain in the future and how to service the customers. “There is a trend now away from banks’ competitiveness on the liquidity side,” she said, meaning that lending will become more expensive because of capital requirements. As a result, “my core worry is that I don’t know what range of products and services I’ll be able to offer corporates.” Anne Boden, head of EMEA, Global Transaction Services at RBS agreed, observing that while corporates might be exempt from a lot of the regulations directly, they will see the impact through banking services and prices.
In the afternoon streams of the conference, banking strategy and risk management were among the more prominent themes.
The EuroFinance International Cash and Treasury Management is being held October 6-8, 2010 in Geneva, Switzerland.