Global Corporate and Investment Banking: An Agenda for Change

Topics: Capital requirement, Banking, Basel II Pages: 0 (30085 words) Published: September 1, 2014
Global Corporate & Investment Banking Practice

Global Corporate and
Investment Banking:  
An Agenda for Change

Global Corporate and
Investment Banking:  
An Agenda for Change

Foreword1
Day of Reckoning? New Regulation and Its Impact
On Capital Markets Businesses

3

Europe: Beyond the Crisis, New Challenges
And Opportunities

31

Asia: The Future of Corporate and
Investment Banking

37

Out of the Shadows: Central Clearing of
Repurchase Agreements

56

Winning in Flow: Scale Is Everything

83

Foreword

Foreword

F

our years after the financial crisis, the agenda for change within the global corporate and investment banking (CIB) industry remains significant. In this compendium, we bring together five articles published over the past year that serve as a ready reckoner for the CIB agenda—not just for capital markets and banking, but also for critical components of the banking infrastructure that supports funding. Day of Reckoning explores the impact of new regulation on capital markets businesses. After-tax return on equity for these businesses is likely to fall from 20 percent pre-regulation to 7 percent, absent any mitigating actions by banks. We suggest strategies that banks can pursue to manage the impact of regulation on their capital markets businesses and to maintain an acceptable level of profitability. We examine portfolio optimization, model and data quality improvements, financial efficiency and operational enhancements. In Europe: Beyond the Crisis, New Challenges and Opportunities, we review the impact of new regulation on corporate banking businesses. Despite significant reductions in credit costs, profits remain well below 2007 peaks in these businesses. Many of the mitigation strategies for capital markets businesses are relevant to restoring profitability to corporate banking. In addition, banks should consider upgrading cross-selling, taking pricing to the next level and improving risk...
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