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I am deputy editor at The Banker, a Financial Times publication. I joined the magazine in August 2015 as transaction banking and technology editor, which remain the beats I cover. Previously I was features editor at Profit & Loss, an FX and derivatives publication and events company. Before that I was editorial director of Treasury Today following a period as editor of gtnews.com. I also worked on Banking Technology, Computer Weekly, and IBM Computer Today. I have a BSc from the University of Victoria, Canada.

Friday, 23 October 2009

The 'Hair of the Dog' Cure

17 September 2009

As the fourth and final day of Sibos comes to a close, it is important to take stock of the week, as well as pick out the conference's key messages in a slightly more frivolous way.

Quote of the Week: “Green shoots are out there, but what fertiliser is being used?” - William White, chief of the economic and development review committee, the Organisation for Economic Co-operation and Development (OECD) in the Big Issue Debate on Day 1

Although Sibos saw a significant drop in attendance this year - over 2000 fewer delegates compared to last year in Vienna - and the general mood was sombre, many said that they were pleasantly surprised at how productive the event was for them and their company, whether technology vendor or bank.

Most said that the foot traffic past their booth was low to non-existent, but that the meetings that they had set up in the run-up to the event were rewarding mainly because the people that had been allowed to attend - due to the cutbacks in travel budget, etc. - were the most senior people and the ones that were ready to conduct business. As one participant said: “The effects of the recession has eliminated the tourists,” but that may have been the effects of the typhoon as well.

The ability to do business and the many references to ‘the end of the crisis’ and ‘green shoots’ lifted the mood on the conference floor, which meant that many were feeling more optimistic than they had felt in the past year or so. But there were still enough sceptics in the audience and on the platforms to keep everyone’s feet firmly on the ground.

As well as White’s comment above, a senior executive from a large European bank related an astute - and appropriate - analogy by comparing the governments’ willingness to throw money at the serious underlying problems of the financial system with the ‘hair of the dog’ cure for an alcoholic’s hangover. He said that for someone suffering from being - let’s say - ‘over-refreshed’, the headache comes from not only dehydration but also the fact that the brain has been happily swilling in a bath of alcohol for hours and in the morning suffers from withdrawal.

Therefore, taking a drink in the morning - the ‘hair of the dog’ - actually does help, but it does not address the problem of alcohol dependency. This is analogous to watching a system driven into crisis as a result of being awash with credit - and the only solution that the governments can come up with is to print more money and release more lines of credit. It could be a recipe for disaster – and inflation, which is a key future concern of corporate treasurers, according to Kathleen Gowin, senior vice president, global financial institutions treasury, Bank of America, in a video interview with gtnews.

Noteworthy Afterthoughts

Transaction banking: is it sexy?
Just to put the record straight and stop the endless twittering, the definitive answer to the question of whether or not transaction banking is sexy is ‘no’ - and this comes from the global transaction banking (GTB) guys themselves. Nor is it the ‘engine of growth’ in a bank, according to a leading analyst, but remains the solid foundations of a stable business... yawn. Thus, GTB’s moment in the limelight should slowly ebb away.

Deutsche Bank leads the green brigade
The most unique press release received this week was from Deutsche Bank (DB) announcing that its Sibos booth was 100% recyclable. Building on last year’s first paperless booth at Sibos, DB took this objective further by being completely carbon neutral at Sibos. In addition to the focus on environmental responsibility, the building and design concept of this year’s Sibos booth also included social responsibility aspects:

  • Environmental responsibility: Prefabricated, frameless lightweight modular materials were used to reduce transport space and weight thus significantly reducing the carbon footprint in transportation. Recyclable and reusable materials were used for the booth that, following the conference, will be donated to a local charity. When choosing the stand’s technical equipment, reduction of energy consumption was a top priority.
  • Social responsibility: Materials and elements were screened for their origin, production, trade routes and practices, etc. The bank aimed to source from fair trade suppliers using manufacturing processes that were ecologically, socially and culturally responsible. Following the conference, the modular elements of the bank’s booth will be donated locally to be reused at the Christian Zheng Sheng College, a Hong Kong-based social development school for youngsters.

First published on www.gtnews.com 

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