{"id":33020,"date":"2016-02-17T05:47:17","date_gmt":"2016-02-17T04:47:17","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=33020"},"modified":"2016-02-18T00:39:50","modified_gmt":"2016-02-17T23:39:50","slug":"33020-2","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/33020-2\/","title":{"rendered":"European Banks Need Further Overhaul?"},"content":{"rendered":"

If you had to pick the moment when European banking reached the point of no return, which would you choose? The July day in 2012 when Bob Diamond\u00a0resigned\u00a0as Barclays\u2019s chief executive officer amid the Libor rigging scandal? Or the fall morning later that year when UBS announced it was pulling out of fixed income and\u00a0firing 10,000 employees? How about Sept. 12, 2010, when Basel III\u2019s raft of costly\u00a0capital requirements\u00a0started upending the economics of global finance?<\/p>\n

All signature events, to be sure. But try May 21, 2015. That\u2019s when 40 per cent of Deutsche Bank stockholders gave co-CEOs Anshu Jain and J\u00fcrgen Fitschen a big thumbs down. By the end of June, Jain was out and Fitschen had agreed to leave the company by May of this year.<\/p>\n

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Illustration by David Foldvari<\/div>\n<\/figcaption><\/figure>\n

Investors are running out of patience with European bank chieftains, and no wonder. Since the fall of Lehman Brothers in September 2008, eight of Europe\u2019s biggest banks have announced layoffs adding up to about 100,000 employees, paid $63 billion in legal penalties, and lost $420 billion in market value. In 2015, Deutsche Bank lost a record \u20ac6.8 billion ($7.6 billion). In mid-February the industry suffered an epic selloff as subzero interest rates, China\u2019s slowdown, the oil crash, and looming regulatory and litigation costs triggered an outbreak of fear not seen since the fall of 2008. Just last year new CEOs took over at Barclays, Credit Suisse, Deutsche Bank, and Standard Chartered.<\/p>\n

Credit Suisse\u2019s new CEO, Tidjane Thiam, is \u201cright-sizing\u201d the investment bank and pushing for a 61 percent jump in pretax income from his international wealth management unit over the next two years. At Barclays, Jes Staley wasted no time cutting 1,200 investment banking jobs and closing offices in Asia and Australia after taking charge in December. Meanwhile, John Cryan, the British executive who\u00a0replaced\u00a0the India-born Jain, is pursuing an unprecedented overhaul of Deutsche Bank\u2019s entire information technology infrastructure to shore up shaky risk-management systems.<\/p>\n

Deutsche agreed to pay $2.5 billion in penalties to U.S. and U.K. authorities for its role in the Libor rate rigging. (No current or former member of the bank\u2019s management board was implicated.) But something deeper was at work, too. European banks aren\u2019t going through a stormy phase that will eventually clear and permit them to claim a new golden age.The industry is undergoing a metamorphosis that will demand a thorough and radical alteration of its core operating model.<\/p>\n

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If you had to pick the moment when European banking reached the point of no return, which would you choose? The July day in 2012 when Bob Diamond\u00a0resigned\u00a0as Barclays\u2019s chief executive officer amid the Libor rigging scandal? Or the fall … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-33020","post","type-post","status-publish","format-standard","hentry","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t