The Financial Services Club's Blog

The Finanser's Week: 25th May - 31st May 2009

Here are our key stories of the week:

• A real-time global pulse
• Branches Wanted: Dead or Alive? And what not to wear for a bank robbery
• Are we hard wired to mess up our money?
• Are you being hacked (and do you know)? 
• Trading water
• Ten Questions and Ten Statements
• Dow Jones ... don't mess with this mother
• FSClub 8th June: Mobiles and M&A
• This house believes new liquid architectures will dominate

A real-time global pulse 

As we use low latency systems, faster payments, twitter and other technologies, we silently watch the revolution of our world from local to global communities, and to a real-time global pulse.  The thing is, do you ever stop to notice?  The fact that you can trade in a millionth of a millionth of a second, transfer monies at light speed, and share news from Beijing to Birmingham as it happens, is the world we live in today.  And we must take notice as real-time everything, including real-time payments with real-time security, is right here, right now.

Branches Wanted: Dead or Alive?

There are wide differences of opinion between different banks of the role of a branch these days.  Is a branch a branch, a store, a transactional centre, a sales centre, a retail lobby, an automated machine or all of these things or none of them?  On the one hand, HSBC are saying that branches are uneconomic; on the other hand, Santander has decided to rebrand all their UK branches and want more.  Meanwhile, there are new banks opening branches, such as Tesco and Metro Bank, and old banks closing branches by the dozen.  Who is right and who is wrong?

And what not to wear for a bank robbery

Some of the worst outfits worn by bank robbers.

Are we hard wired to mess up our money?

A variety of experts are analysing our brains to see how they work with making decisions about money and risk.  Their conclusions are that we simplify to the point of a simple will I win or lose view.  The result is one explanation of what causes stock market booms and busts.

Are you being hacked (and do you know)?

Two internet software security firms, McAfee and Sophos, produced some interesting reports on fraud, malware and cybercrime this week.  According to McAfee, Americans have lost about $8.5 billion because of internet scams in the last two years alone. As a result, they've launched an interesting series of videos to educate your Average Joe's and Jane's in what to do and what not to do for safe surfs.  Meanwhile, Sophos claim that "one newly infected webpage is discovered every 4.5 seconds", and much of this is being proliferated by social networks such as Facebook.

Trading water

Last year, I wrote an extensive piece about a vision of trading in the future based upon 24*7 real-time global markets and the impact of news algorithmics.  A key piece of that article was the idea of water being a rare commodity and hence of very high value. Traders globally focused upon Oceans, Rivers and Lakes, and the world fought wars over water.  This fiction is now coming true.

Ten Questions and Ten Statements

McKinsey posted a great little conversation starter this week entitled:"What next? Ten questions for CFOs", and subtitled: "As companies shift their attention from fighting the crisis to getting the most from the recovery, CFOs must keep them focused."  It's nice to see that McKinsey are calling this a recovery now, and so here's the 10 questions to get the conversation started ...

Dow Jones ... don't mess with this mother

If you thought the stock markets were scary, then take a look at this ...

FSClub 8th June: Mobiles and M&A

We have two club meetings taking place on the same date on 8th June. In Ireland, the meeting will focus upon Mobile Finance whilst our meeting in Vienna studies the liklihood of M&A in CEE.

This house believes new liquid architectures will dominate

On 9th June, we are holding a Capital Markets Chamber meeting of the Financial Services Club that will debate the motion: "This house believes new liquid architectures will dominate bank's strategic plans from next year onwards".  This debate focuses upon how banks benefit from doing liquidity risk management right, particularly in a post-Lehman world.

And the biggest news stories of the week include:

FSA reveals its 'severe' bank stress tests but hides results (Independent)
Nationwide hits out at savings protection scheme (Independent)
Santander’s renaming of UK banks will not cost it much  (Times)
Europe tightens regulatory noose on City  (Telegraph)
German debts set to blow 'like a grenade' (Telegraph)
Hank Paulson Admits He Never Really Understood How Mortgage-Backed Securities Worked (Consumerist)
Post-trade suffers heat of regulation (Financial Times)
Financial Sector Cybersecurity Issues (Information Security Resources)

For stories by date, click on the dates below:

• 30th May 2009
• 29th May 2009
• 28th May 2009
• 27th May 2009
• 26th May 2009
• 25th May 2009

Things worth reading: 30th May 2009

Things we're reading today include:

Northern Rock risk revealed in 2004 (Financial Times)
Lloyds investors urged to spurn Blank (Financial Times)
London Metal Exchange joins bid for LCH.Clearnet (Financial Times)
LSE and Plus resolve legal dispute (Financial Times)

The financial crisis and the role of central banks: The experience of the ECB, speech by Jean-Claude Trichet, President of the ECB
The media and the financial crisis: Journalism failed (Daily Finance)

It’s Heeerrre: ‘Pay With Facebook’ Is In The Wild (Techcrunch)
Community Banks On The Social Web (Lon Cohen's Blog)

Cartoon by Peter Brookes in the Times

Quote of the Day:

"Capitalism without bankruptcy is like Christianity without hell"
Frank Borman, Astrounaut

Are we hard wired to mess up our money?

I'm always a sucker for articles about the brain and how the brain works, ever since Baroness Susan Greenfield presented at a meeting I chaired about ten years ago.

Her latest contribution to the debate about the financial crisis focuses upon how City traders are making rash decisions due to video games causing the brain's prefrontal cortex to be screwed.

Nice!

More likely is the testosterone levels in the trading rooms just causes rash decision making.  After all, it is widely known that men are simple "yes" and "no", mono-functioning beasts.  Bring a load of femininity into the trading rooms and we would all be sorted out, wouldn't we?

Not necessarily ... but there is a strong view that a woman's touch to finance would not go amiss.

This may not be the solution though, as the latest research postulates that we are simply hard-wired to screw up our finances. 

All of us.

Discussing his research in Neuron magazine, Dr Scott Huettel of the Duke Centre for Neuroeconomic studies states: "What sort of strategy people tended to use could be predicted, surprisingly, by how their brain responded to rewards: if there were large responses to monetary reward in a brain area called the ventral striatum, that person tended to simplify decision problems to only consider winning or losing."

In other words, we do not make rational financial decisions, but simply bring them down to a question of: "will I win or lose?"

It might as well be the flip of a coin.

And then, just to make it easy, another psychology study published this week uses MRI scans of the brain and finds that receiving expert advice on finance may actually shut down areas of the brain responsible for decision-making processes, particularly when individuals are trying to evaluate a situation where risk is involved.

So the "will I win or lose?" question becomes a no-brainer if an expert in coin-flipping says that you will win.

Does this explain why a man in a string vest in a mobile home in Alabama can be sold a $400,000 mortgage he cannot afford?

Or why a celebrity can invest in a ponzi scheme run by a shyster called Bernie Madoff?

Or why the Chairman of the Federal Reserve can believe that a house of non-collateralised derivatives cards run by prestigious investment banks could not fail?

I wonder ...

Things worth reading: 29th May 2009

Things worth reading today include ...

Western Union malware attack rides into inboxes (Sophos Blog)
Wachovia's Ken Thompson lands at PE firm (The Deal)

FSA reveals its 'severe' bank stress tests but hides results (Independent)
Bank stress tests too easy, analysts say (Telegraph)
FSA doomsday package includes a free massage for stressed banks  (Telegraph)

Brussels to step up pace of bank reform (Financial Times)
Brussels to raise guarantees for fund investors (Euractiv)
Warsaw urges banks to shun dividends  (Financial Times)

Tilson: Banks Face $1 Trillion of Losses Ahead (Money News)
DTCC seeks US oversight of ‘trade warehouse’  (Financial Times)
Single-Regulator Plan for (US) Banks Now Close (Wall Street Journal)
US to host next G20 world meeting (BBC)

Banks rush to build capital via property  (Financial Times)

Quote of the Day:

"I've known banks that gave loans to guys who wanted to open bars, and their only collateral was that I was going to drink there."
Lou Grant, Rhoda

Branches Wanted: Dead or Alive?

There are wide differences of opinion between different banks of the role of a branch these days.

Is a branch a branch, a store, a transactional centre, a sales centre, a retail lobby, an automated machine or all of these things or none of them?

On the one hand, I see HSBC saying that branches are uneconomic; on the other hand, Santander has decided to rebrand all their UK branches and want more.  Meanwhile, there are new banks opening branches, such as Tesco and Metro Bank, and old banks closing branches by the dozen.

Who is right and who is wrong?

Are branches alive and kicking, dead and gone, or in terminal decline?

Answer: depends where you sit.

A branch is useful for banks that see them as a key channel and as an asset for human interfacing.

Now that sounds like a dreadful techno-nerd phraseology but then, truth be known, I’m a dreadful techno-nerd person.

I hate branches.

Can’t stand the things.

Only ever go in there for paying in cheques, and how long will they last for gawd sake (2018 in Britain).

If that’s the only reason for going into a branch, then close them down.

But not everyone goes to branches for cheques.

Many want branches around as a place to go to ensure the bank can be trusted and to talk to someone.  To human interface.

And, after the many issues of the past year with banks closing, the ability to queue and get your money out of it physically seems somehow reassuring.

Ah, but if trust is your only reason for having branches, then close them down.

After all, trust in banks has collapsed in the last year and if you only keep your branches open so that people can queue when you collapse and get their money out, then that's a pretty rum state of affairs.

Equally, some people trust a one man bank more than some big banks, so this is not the key either.

But then, that one man does have a branch so maybe there is something in that?

You see, it is all about the human connection isn’t it?

The ability to transact and interact with a human.

But, yet again, you don’t need branches for that either do you?

You can interact with humans on telephones, via keyboard and, soon, via remote video.

So what is the real point of a branch?

It’s …

… errrr …

… it’s to …

… to errrr …

… it’s to sell, isn’t it?

The future bank will have big sales centres replacing existing branches, and then lots of automated satellite stations for transaction services.

No.

Rubbish.

You can sell via the internet and telephone too. After all, if you needed branches then no-one would bank with call-centre only banks such as First Direct.

And yes, First Direct does have ATMs via HSBC but HSBC branches do not cater to First Direct customers or vice versa.

So, what is the real point of a branch?

It’s a channel.

And, if you are a bank that sees the human channel with physical connectivity as being important, as Santander obviously do, then you need branches.

If you are a bank that sees remote connectivity and services with limited human interaction in a physical space, as HSBC see the world, then you do not need branches ... just automated transaction centres.

And customers will self-select their preferred bank to service them based upon their view of the bank's competence at managing these channels and the channels they offer that suit the customer's lifestyle.

So, if I’m a customer who wants a bank with branches and humans, then I will choose between Santander and the few other banks on Main Street left to service me that way.

Meantime, if I’m a customer who never wants to see a branch again in their lifetime – and there are some of us who feel that way! – then give me First Direct, Smile, PayPal, Zopa and SmartyPig any day.

This is the reason why Metro Bank and Tesco are getting into UK bank branches … because they recognise that the incumbent players have no idea as to whether to be committed or de-committed to their branch strategies and operations.

And while the incumbents dither and prevaricate, they are just losing on both ends of the scale.

Their customers are dissatisfied with their shoddy, under-invested branch operations, and their competitors are seeing huge opportunities to recreate the branch experience to gain traction with those customers who want a branch experience.

No wonder banking is such fun when the business models are being reconstructed in real-time and the decision makers haven’t noticed or reacted.

Meanwhile, if you are committed to branch as a channel, it would do you no harm to look over the Financial Brand's Future of Branches presentation.

This post also relates strongly to the Multichannel Myth, whereby a bank should focus on single channel excellence, and a huge debate 18 months ago about branches.

And what not to wear for a bank robbery

A great story in today's Metro about a man who robbed a store in America wearing a beer box on his head:

They go on to cite other amusing robberies, such as the chap who thought he could disguise himself as a tree:

and the wazzock who thought that wrapping his head in duct tape would work:

#

Thanks Metro for making my day ... oh yea, and punk, do you feel lucky?

Postscript: add this to a few other ways to rob bank branch stories

This house believes new liquid architectures will dominate

On 9th June, we are holding a Capital Markets Chamber meeting of the Financial Services Club that will debate the motion: "This house believes new liquid architectures will dominate bank's strategic plans from next year onwards". 

This debate focuses upon how banks benefit from doing liquidity risk management right, particularly in a post-Lehman world.

Lehman Brothers’ demise shocked the world into taking liquidity risk more seriously. Three days after the bank fell, central regulators agreed to implement a demanding new liquidity risk regime. The UK’s FSA has acted decisively to define a data-hungry and intensive approach.

By following the regime, banks can obtain real business benefits and their boards can sleep easier ... but will they?

To answer this, and other questions, the Financial Services Club with our Chair, PJ Di Giammarino of the JWG-IT, have gathered leading luminaries to study the FSA and de Laroisiere rulings. 

Speakers include:

• Rick Weinstein, former Head of Global Structured Credit, Dresdner Kleinwort
• Andrew Carter, former CRO at Zurich Financial Services and former Head of Group Operational Risk at NatWest
• Don Deloach, CEO, Aleri

who can all be seen talking about this crisis in this short video clip:

If this subject is close to your heart, then register to attend: FSClub members / non-members.

Things worth reading: 28th May 2009

Things we're reading today include ...

Companies:

Nationwide hits out at savings protection scheme (Independent)
UBS chief Oswald Grübel defends decision to raise the salaries of investment bankers  (Times)
Santander’s renaming of UK banks will not cost it much  (Times)
Santander: who was Abbey's most famous customer? (Telegraph)

Regulations:

Financial services: Commission proposes stronger financial supervision in Europe, press release from the European Commission
The Joint Press Conference on European Financial Supervision, remarks by José Manuel Barroso, Charlie McCreevy and Joaquín Almuniat
Europe tightens regulatory noose on City  (Telegraph)
Darling opposes EU super-regulator for banks  (Guardian)
The role of the ECB in financial crisis management, Speech by Lucas Papademos, Vice-President of the ECB
FSA makes six arrests over alleged insider dealing (Guardian)

Economic Crisis:

Unsung heroes of financial crisis fight for neutrality  (Financial Times)
Euro poised to inflict new wounds on Europe  (Telegraph)
Number of problem US banks soars (BBC)
Zombie banks walk among us  (CNN)
Bank of England’s Paul Tucker says banks should be taxed to pay for bail-outs (Telegraph)
The Greatest Swindle Ever Sold (how TARP went fro $700bn to $12tn) (The Nation)

Quote of the Day:

"The government solution to any problem is usually at least as bad as the problem."
Milton Friedman

Are you being hacked (and do you know)?

According to McAfee, Americans have lost about $8.5 billion because of internet scams in the last two years alone.  As a result, they've launched an interesting series of videos to educate your Average Joe's and Jane's in what to do and what not to do for safe surfs.

Here's Episode 1 that talks about 419s, Denial of Service attacks and more:

Can't wait for Episodes 2 onwards, as each episode provides a docudrama about how criminals make money through the illegal use of technology to compromise personal and business data.

The films pick up the personal stories behind cybercrimes - including phishing, bank scraping and fraudulent emails - and the devastation they cause.

It is strongly recommended that you share this website with non-finance net users, as it educates visitors about online safety and what to do if you fall victim to an attack.

Similarly, another internet security firm, Sophos, have just posted some useful insights and white papers, which I downloaded.

One had the screaming headline: "One newly infected webpage is discovered every 4.5 seconds."

Oh no!

This particularly relates to SQL infection attacks, with examples of trusted websites such as Business Week, Adobe and Sony being subjected to such attacks and trying to download malware, spyware and scareware.

They are now particularly concerned about social networks and the opportunity for phishing and malware in such networks, as folks are more trusting when they get messages from friends in these networks.

One way this works is to send a link to a video to watch on Slide or similar social apps.  You click and it downloads a codec to play the video ... but it does not.  It's malware it downloads.

Another very recent example is how Facebook has started sending rubbish links from friends in the past week, saying "click on this" and "look at that" with links to things like www.junglemix.in, www.kromked.net, mygener.im, www.151.im, www.121.im and www.123.im.

The aim is to have you clickthrough and the phishers then grab your Facebook username and password.

I know it's phishing, which is why Sophos are now talking about Phacebook, but do your friends know?

If not, be afraid.

Be very afraid.

Mwuh-ha-ha-haaaaah.

Ten Questions and Ten Statements

McKinsey posted a great little conversation starter this week entitled:

What next? Ten questions for CFOs

and subtitled:

"As companies shift their attention from fighting the crisis to getting the most from the recovery, CFOs must keep them focused."

It's nice to see that McKinsey are calling this a recovery now, and so here's the 10 questions to get the conversation started:

1. What shape will a recovery take?
2. Have you restructured enough?
3. Is your supply chain sufficiently flexible?
4. Do you have a short list of acquisition targets ready?
5. Should you restart conversations with potential alliance partners?
6. Are you ready to divest newly underperforming businesses?
7. Do you have the financial resources needed for an upturn?
8. Have you taken advantage of the buyers’ market for talent and other resources?
9. Do you know what risks a recovery might bring?
10. Can you sell your recovery plan to investors?

Interesting, and if your CFO doesn't have the answers then maybe your Corporate Banking Advisor should be assisting ...

... meantime, James Gardner who will be speaking at the Financial Services Club along with other bloggers on 16th June, posted a lovely little item about the fact that: "You have to work in a bank to know how to work a bank".

He came up with these statements from vendors:

"You can implement this quickly and get a payback this year"
"The productivity improvements here will pay for themselves"
"We have shown you a real business case and the numbers stack up. But you still say no"
"All I have to do is get a meeting with <C-suite executive> to unblock this deal"
"I will only meet with <insert senior management level> due to <status/time/preference>"

and explains why vendors who think this way don't understand how banks work.

I thought I would add a few more to (a) make this ten statements and (b) add my own vendor think:

What a vendor says: "Why don't we partner with you on this?"
What a vendor means: "Instead of discount, why don't we make out this is a JV"

What a vendor says: "We can provide this on a pure benefits basis"
What a vendor means: "We know we will save you at least 5% more than this is going to cost us"

What a vendor says: "If you sign now, we'll be able to give you X% discount"
What a vendor means:  "It's the end of the quarter, and I'm desperate"

What a vendor says: "Why don't you come and visit XYZ Competing Bank and see how they've done this?"
What a vendor means:  "I'll shame you into buying"

What a vendor says: "Just on green emissions alone, you will see ROI this year"
What a vendor means:  "It doesn't pollute as much as cow's methane gases"

Please feel free to add any more CFO, bank or vendor views as you see fit ...

Things worth reading: 27th May 2009

Things we're reading today include ...

Companies:

FSA punishes third Morgan Stanley trader (Times)

FSA bans third ex-Morgan Stanley trader (Telegraph)

‘Robust’ business for Deutsche Bank (Financial Times)

PwC rejects global plan for Lehman recoveries (Telegraph)

Citigroup to hold fast in China and India (Financial Times)

JPMorgan’s WaMu Windfall Turns Bad Loans Into Income (Bloomberg)

Markets:

OTC derivative clearing opened to buyside (Financial Times)

Millionaire numbers 'have halved' (BBC)

Half of UK 'have no pension pot' (BBC)

Technology:

Mobile Banking Hits Mainstream in 2009 Says TowerGroup (Payments News)

Facebook worth $5bn less as recession bites (Independent)

Payoff Over a Web Sensation (Susan Boyle) Is Elusive  (New YorkTimes)

140 Characters Conference, June 16-17, New York

Quote of the Day:

Not sure if we'll get one of these every day, but I thought a quote to lift each day would work for me.  Today's Quote of the Day is about football managers, as it is the European Champions League Final this evening:

"There are only two types of manager.  Those who have just been sacked and those who are about to be sacked."
Ben Philip

I wonder if we could apply the same to management in finance?

A real-time global pulse

As we use low latency systems, faster payments, twitter and other technologies, we silently watch the revolution of our world from local to global communities, and to a real-time global pulse.

The thing is, do you ever stop to notice?

The fact that you can trade in a millionth of a millionth of a second, transfer monies at light speed, and share news from Beijing to Birmingham as it happens, is the world we live in today.

You can find out what is happening in the economy, business, banking and life faster than the major TV news channels. Equally, as news is reported, you can supplant the news with feet on the street views by tapping into this global pulse.

This was brought home to me as I watched the April 1st G20 protests in Twitter, YouTube and live on the BBC News24 and Sky News*. The mind-meld of real-time social media channels with news media channels created a world of almost like being there, even though you weren’t. Like being omniscient, even though you aren’t.

This global real-time pulse is now as true for the world of finance as it is for the world of news.

We can operate a global brain pulse of knowledge about stocks and trading and investments.

We can provide real-time dashboards for cash management and pooling across corporate supply chains as an information service.

We can run a real-time money transfer service between migrants in America and their remote families in Asia.

We can even create a real-time pulse check for fraud and money laundering. That’s partly what the changes to cover payments is meant to achieve.

However, in financial services generally, this is happening and we are getting there …

... but it is happening very, v e r y, v  e   r    y     s      l      o       w        l         y.

What’s the issue?

If we can trade and socialise in real-time, why can’t we buy and sell in real-time?

Is it down to the very nature of fraud and all the legal meanderings that go around such commercial trading activities?

The fact is that if you pay in real-time and, later, want to revoke the payment, who is liable?

You pay in real-time and fraud occurs, who is at fault?

One view would be that, like cash, you should be able to make payments in real-time. This would make a transaction irrevocable. You do the deal and it’s done. This approach would revolutionise finance, as there would be no issues over trading any size of goods.

Once the money is transacted in real-time, it’s yours.

That was meant to be the point of the UK’s Faster Payments, but it hasn’t happened.

On the one hand, Faster Payments is only for standing orders, telephone and internet payments, where the security measures mean that most of the payments would need a personal authorisation to take place.

Therefore, if the payment was incorrect after the fact then … tough. It’s your fault.

That’s why card payments aren’t included, as they are far too open to abusive practices today.

On the other hand, you could take the view that a real-time payment doesn’t necessarily mean what it says on tin. It’s only trading bits and bytes of data you see, not real cash. No real money is actually moved between the accounts. Therefore, you could say that the electronic transaction takes place in real-time, but monetary movements are not signed and sealed until end-of-day.

Just transfer the bits and bytes of real-time data files between accounting systems and follow up with real-time monetary movements later.

Oh yes, that’s what we do anyway isn’t it?

Transact the data and then, later, settle the money.

So, real-time payments should be OK, shouldn’t they?

It’s only trading data after all.

And meanwhile, if you’re worried about the fraud of real-time payments then real-time fraud detection should overcome this. For example, if you suspect it’s a fraudulent transaction then, in real-time, a random security question can be generated at the POS or online.

Then who needs PINs and one-time passwords?

In real-time, if you want to spend 10,000 on a car on eBay … no worries. Just tell us, in real-time, what’s your post code, name one direct debit on your account and tell us your first pet’s name?

If you can't answer those, then choose from a list. 

So here's a near-term vision for real-time payments.

At payment time, whether online or offline, internet, telephone or POS, you no longer enter a PIN or password.  You just to answer a random question from a list such as:

- enter the number that represents the last payment from your account
- enter the data (DDMMYY) of the last ATM transaction you made
- enter an amount that leaves your account by direct debit each month
- enter your postcode/zipcode
- enter your main telephone number as registered on your account
- enter your main personal code (could be a PIN or passport number, birth date - your choice)
 ... etc.

Note, this list would change every time you pay and would probably only apply for payments over let's say 100 units of £, € or $.

Real-time everything, including real-time payments with real-time security.

Now we’re cooking.

* Just noticed I naturally phrased this line with the term "watched in" social media and "watched on" traditional media.  This shows how you are far more engaged "in" an interactive world of media, rather than the one-way receiving "on" traditional media.

Dow Jones ... don't mess with this mother

If you thought the stock markets were scary, then take a look at this ...

We have two club meetings taking place on the same date in June. 

8th June to be exact.

On 8th June we have a meeting in Ireland focused upon Mobile Finance, as a follow-on to our London meeting which takes place on 28th May, and a meeting in Vienna focused upon M&A in CEE.

FSClub Ireland: "How mobiles are changing customer relationships"

The next FSClub Ireland meeting takes place at the RDS Ballsbridge from 6.00 p.m. with a focus upon "how mobile channels are changing the relationship with the customer".

The meeting will take the form of a panel discussion chaired by Vincent Brennan, Head of Payments for Bank of Ireland, who will be joined by key industry leaders Steve Townend, Chief Executive Officer, MoBank and Roy Vella, Director for Group Mobile Services at the Royal Bank of Scotland.

MoBank is a new mobile service that allows customers to buy and pay for goods wherever and whenever they want. By working with the customers’ existing account it is a convenient and secure way to make day-to-day transactions and administer personal finances from a mobile phone or any Internet connected device.

Steve is co-founder and Chief Executive of MoBank Ltd, previously, he was a founding Director of both egg and first direct, where he was the driving force behind a number of the high profile innovations. Steve has been in banking for over 30 years and held Executive Roles at a number of the UK's leading banks including Barclays Private Clients International where he was COO. He holds several other Directorships mainly in start-up organisations.

Roy Vella, Director, Group Mobile at Royal Bank of Scotland Group leads the Group's mobile efforts globally as an "intrapraneur". Roy was previously Head of Mobile for PayPal Europe and helped jump-start multiple new businesses within PayPal during his time there. First Merchant Services by building the team and driving large channel partnership deals. Next, PayPal's launch into the travel space and finally with mobile in Europe. Prior to PayPal, Roy served in various startup roles from Partner and Co-founder to VP of Sales & Marketing.

If you wish to attend this meeting, please register here.

FSClub CEE: "Consolidation of the Banking Industry in CEE"

Following our successful kick-off meeting on January 14th, the follow-on conference in Frankfurt in March and the meeting on April 29th, FSClub CEE will run a meeting at the residence of the British Ambassador focused upon M&A across Central & Eastern Europe.

An excellent panel of speakers will be speaking, including:

• Dieter Spranz, Partner, WOLF THEISS Attorneys-at-Law, M&A and Divestiture specialist;

• Sava Dalbokov, CEO, Good Bee Holding, daughter of Erste Group, former President of the executive board of Erste Bank a.d. Novi Sad, Serbia, and board member ERSTE & STEIERMAERKISCHE BANK d.d. Rijeka, Croatia; and

• Helmut Bernkopf, board member, BANCA Unicredit group Corporates, formerly board member of Bank Austria Romania, HVB Bank Romani, "General Manager" BA Central and Eastern Europe Region, and Vice Chief of UniCredit Bank Russia.

The evening is sponsored by S1 and will be moderated by Lydia Goutas and Thomas Labenbacher, Co-Chairs of the Financial Service Club CEE.

Register here for the meeting if you are interested in attending.

Things we're reading today include ...

MP urges probe into HBOS loans (BBC)
German debts set to blow 'like a grenade' (Telegraph)
Iceland asks parliament to start EU talks (Euractiv)
Integration and innovation - The Alpha and Omega of a successful retail payments market in Europe, speech by Jean-Claude Trichet, President of the ECB
Hank Paulson Admits He Never Really Understood How Mortgage-Backed Securities Worked (Consumerist)

Green shoots set to wither, warns Nobel Prize winner (Independent)
Post-trade suffers heat of regulation (Financial Times)
Private equity in banking (Financial Times)
Financial Sector Cybersecurity Issues (Information Security Resources)

Last year, I wrote an extensive piece about a vision of trading in the future based upon 24*7 real-time global markets and the impact of news algorithmics.  A key piece of that article was the idea of water being a rare commodity and hence of very high value.

Traders globally focused upon Oceans, Rivers and Lakes, and the world fought wars over water.

Part of this was based upon real ideas of what is happening in the world, as exemplified by the film "FLOW".

FLOW is "Irena Salina's award-winning documentary investigation into the most important political and environmental issue of the 21st Century - The World Water Crisis. Salina builds a case against the growing privatization of the world's dwindling fresh water supply with an unflinching focus on politics, pollution, human rights, and the emergence of a domineering world water cartel."

The film was released in December (US import DVD only) and illustrates some mind-numbing numbers about the trading potential of water reserves:

• Of the 6 billion people on earth, 1.1 billion do not have access to safe, clean drinking water (www.charitywater.org)

• The U.S. Environmental Protection Agency currently does not regulate 51 known water contaminants (www.foodandwaterwatch.org)

• While the average American uses 150 gallons of water per day, those in developing countries cannot find five (www.charitywater.org)

• The water and sanitation crisis claims more lives through disease than any war claims through guns (www.water.org)

• According to the National Resources Defense Council, in a scientific study in which more than 1,000 bottles of 103 brands of water were tested, about one-third of the bottles contained synthetic organic chemicals, bacteria, and arsenic (www.nrdc.org)

• Water is a $400 billion dollar global industry; the third largest behind electricity and oil (Source: CBS News, FLOW)

"There are estimates that from five hundred thousand to seven million people get sick per year from drinking tap water" - Erik Olson, Deputy Staff Director of Barbara Boxerʼs Environmental and Public Works Committee (EPW)

"Californiaʼs water supply is running out – it has about 20 years of water left in the state" - Maude Barlow, National Chairperson of the Council of Canadians

"There are over 116,000 human-made chemicals that are finding their way into public water supply systems" - William Marks, author of Water Voices from Around the World

"In Bolivia nearly one out of every ten children will die before the age of five. Most of those deaths are related to illnesses that come from a lack of clean drinking water" - Jim Schultz, founder of the Democracy Center in Bolivia

"The cost per person per year for having 10 liters of safe drinking water every day is just US$2" - Ashok Gadgil, Senior Staff Scientist in the Lawrence Berkeley National Laboratory

I would seriously suggest you (a) watch the film and (b) invest in water as a rare commodity!

Hattip to Michael Pawlisz

Meanwhile, for the opposing view in a film, watch Kevin Costner's "Waterworld":

Finally, if you missed it, I recommend you spend one minute and just watch this:

It is truly amazing, from the new BBC series "South Pacific".

My friends at the Industry and Parliamentary Trust are running an important meeting on Thursday 11 June 2009 at Westminster Hall, the Houses of Parliament, London.

The meeting will focus upon the EU's response to the financial crisis and particularly on the EU High-Level Expert Group, led by Jacques de Larosiere, focusing on the reform of financial legislation in Europe.

Their report, highlighting the critical areas that will give impetus to better regulation with the aim of creating a more financially stable Europe, calls for the ECB to chair a proposed European Systemic Risk Council (ESRC) - a pan-European advisory council on financial risk that would be made up of ECB Governors, national supervisors from the financial sectors, and a representative from the European Commission.

This seminar will focus on the findings of this communication and the likely response of the European institutions with confirmed speakers including:

• Philip Dunne MP, Chair of the All Party Corporate Governance Group
• Olivier Girard, DG Internal Market and Services, European Commission
• Dr David Doyle, Senior Policy Advisor, Brunswick (expert in EU financial services)
• Steven Hall, Head of Financial Services, Confederation of British Industry
• Roland Rudd, Founding Chairman of Business for New Europe
• David Shirreff, Britain's Business Correspondent, The Economist

If you would like to attend this event, it costs £195 and you can book through Lynne McDowell.

Things we're reading today include:

DTCC open to talks on LCH merger (Financial Times)
RBS chiefs handed £5m in bonuses (Times)
Brazilian bank develops taste for life in London (Times)
Wonga pushes web loan innovation (Financial Times)

Banks may miss key lending targets (Telegraph)
Brown to Bank: lighten up  (Financial Times)
British banks revolt against Obama tax plan (Telegraph)

Bank of Japan chief sees 'mild recovery' for Japan  (Financial Times)

Rising debt clouds market optimism  (Financial Times)
Reflect while the bears and bulls battle for dominance (Financial Times)

World Bank warns of social unrest (BBC)

Here are our key stories of the week:

• Robert Peston presents ...
• Stéphane Garelli presents ... 
• Alistair Darling presents ...
• The total view on SEPA and the PSD
• Bank makes a billion
• This firm is full of it ...
• Winners in Capital Markets Tech
• The Great Hargeisa Goat Bubble
• Weird Banking News

Robert Peston presents ...

Robert Peston, the BBC’s lead reporter on the banks throughout this crisis, presented a discussion I attended the other night.  Robert’s presentation was titled “The new capitalism: The cost of men behaving badly”.  He presented under Chatham House rules, so the summary below is purely my spin on what he said and not his words.

Stéphane Garelli presents ...

Stéphane Garelli was the keynote at last week’s conference on payments.  For those who are unaware, Stéphane made Davos what it is today and is a world authority on competitiveness.  Interviewing Stéphane before his speech, I asked him what he thought we would be talking about this time next year?  “Mass unemployment and hyper-inflation” was his answer.  Then he said, as a result of inflationary forces, the stock markets would see another major bull run and will rally back to record highs soon enough.  Here's the summary of the whole speech.

Alistair Darling presents ...

Alistair Darling, the UK Chancellor, was asked whether the UK Government's ownership of the banks changed the banks' activities?  Here's what he said: "There are going to have to be some changes in culture, and there are going to be changes in approach. The banks cannot just imagine that after everything is over we can just go back to business as usual."  Read the whole speech here.

The total view on SEPA and the PSD

At the payments conference last week, a major theme was the Payment Services Directive (PSD) and Single Euro Payments Area (SEPA).  Here is a complete summary of all the presentations and comments made about their progress.

Bank makes a billion

Like most of the banks, the Bank of England has made a bundle out of the credit spreads of the last six months.   In fact, over a billion pounds of profit.

This firm is full of it ...

I hear all sorts of rumblings about Merrill Lynch's unhappiness with Bank of America.  These two stories prove just how bad it is getting.

Winners in Capital Markets Tech

Inside Market Data and Inside Reference Data announced their Award winners for 2009, and we listed the winners here for those interested.

The Great Hargeisa Goat Bubble

BBC Radio 4 aired a fantastic 45 minute spoof play about the global derivatives market last week, with Stephanie Flanders starring.  The play was originally published as a short story in the Financial Times.  Here's the script from the original for those interested.

Weird Banking News

Two video clips of amusing news stories about financial services and banking this week.

And the biggest news stories of the week include:

Credit crunch has ended, according to Ted and Libor (Times)
Tim Geithner to reform US financial regulation (Telegraph)
New credit card limitations in US  (BBC)
China is preparing for a world where the yuan trumps the dollar (Telegraph)
China has long way to go to dislodge dollar (Financial Times)

Blank exit is a sorry end to HBOS disaster (Telegraph)
HSBC warns branch network 'uneconomic' (Telegraph)
Citigroup looks to slash tech costs (Financial Times)
HP cuts jobs as profits fall 17% (BBC)

Trader banned for concealing $10m bet after long boozy lunch (Telegraph)
Lloyds boss's account drained by Barclays thief (Daily Mail)

For stories by date, click on the dates below:

• 23rd May 2009
• 22nd May 2009
• 21st May 2009
• 20th May 2009
• 19th May 2009
• 18th May 2009

US TV Channel CNBC is known for its serious financial reporting, but what the hell is CNBC's Jeff Macke smoking in this clip: 

Rumours are that he had ended his contract period with the news channel and this was his swan-song.

It is now!

Meanwhile, over on ABC News, bankers are in the headlines again, but this time for very sweet reasons:

How lovely.

Happy May Bank Holidays
(Monday is a national holiday here in Britain)

FSClub 8th June: Mobiles and M&A

We have two club meetings taking place on the same date in June. 

8th June to be exact.

On 8th June we have a meeting in Ireland focused upon Mobile Finance, as a follow-on to our London meeting which takes place on 28th May, and a meeting in Vienna focused upon M&A in CEE.

FSClub Ireland: "How mobiles are changing customer relationships"

The next FSClub Ireland meeting takes place at the RDS Ballsbridge from 6.00 p.m. with a focus upon "how mobile channels are changing the relationship with the customer".

The meeting will take the form of a panel discussion chaired by Vincent Brennan, Head of Payments for Bank of Ireland, who will be joined by key industry leaders Steve Townend, Chief Executive Officer, MoBank and Roy Vella, Director for Group Mobile Services at the Royal Bank of Scotland.

MoBank is a new mobile service that allows customers to buy and pay for goods wherever and whenever they want. By working with the customers’ existing account it is a convenient and secure way to make day-to-day transactions and administer personal finances from a mobile phone or any Internet connected device.

Steve is co-founder and Chief Executive of MoBank Ltd, previously, he was a founding Director of both egg and first direct, where he was the driving force behind a number of the high profile innovations. Steve has been in banking for over 30 years and held Executive Roles at a number of the UK's leading banks including Barclays Private Clients International where he was COO. He holds several other Directorships mainly in start-up organisations.

Roy Vella, Director, Group Mobile at Royal Bank of Scotland Group leads the Group's mobile efforts globally as an "intrapraneur". Roy was previously Head of Mobile for PayPal Europe and helped jump-start multiple new businesses within PayPal during his time there. First Merchant Services by building the team and driving large channel partnership deals. Next, PayPal's launch into the travel space and finally with mobile in Europe. Prior to PayPal, Roy served in various startup roles from Partner and Co-founder to VP of Sales & Marketing.

If you wish to attend this meeting, please register here.

FSClub CEE: "Consolidation of the Banking Industry in CEE"

Following our successful kick-off meeting on January 14th, the follow-on conference in Frankfurt in March and the meeting on April 29th, FSClub CEE will run a meeting at the residence of the British Ambassador focused upon M&A across Central & Eastern Europe.

An excellent panel of speakers will be speaking, including:

• Dieter Spranz, Partner, WOLF THEISS Attorneys-at-Law, M&A and Divestiture specialist;

• Sava Dalbokov, CEO, Good Bee Holding, daughter of Erste Group, former President of the executive board of Erste Bank a.d. Novi Sad, Serbia, and board member ERSTE & STEIERMAERKISCHE BANK d.d. Rijeka, Croatia; and

• Helmut Bernkopf, board member, BANCA Unicredit group Corporates, formerly board member of Bank Austria Romania, HVB Bank Romani, "General Manager" BA Central and Eastern Europe Region, and Vice Chief of UniCredit Bank Russia.

The evening is sponsored by S1 and will be moderated by Lydia Goutas and Thomas Labenbacher, Co-Chairs of the Financial Service Club CEE.

Register here for the meeting if you are interested in attending.

Things worth reading: 26th May 2009

Things we're reading today include ...

MP urges probe into HBOS loans (BBC)
German debts set to blow 'like a grenade' (Telegraph)
Iceland asks parliament to start EU talks (Euractiv)
Integration and innovation - The Alpha and Omega of a successful retail payments market in Europe, speech by Jean-Claude Trichet, President of the ECB
Hank Paulson Admits He Never Really Understood How Mortgage-Backed Securities Worked (Consumerist)

Green shoots set to wither, warns Nobel Prize winner (Independent)
Post-trade suffers heat of regulation (Financial Times)
Private equity in banking (Financial Times)
Financial Sector Cybersecurity Issues (Information Security Resources)

Trading water

Last year, I wrote an extensive piece about a vision of trading in the future based upon 24*7 real-time global markets and the impact of news algorithmics.  A key piece of that article was the idea of water being a rare commodity and hence of very high value.

Traders globally focused upon Oceans, Rivers and Lakes, and the world fought wars over water.

Part of this was based upon real ideas of what is happening in the world, as exemplified by the film "FLOW".

FLOW is "Irena Salina's award-winning documentary investigation into the most important political and environmental issue of the 21st Century - The World Water Crisis. Salina builds a case against the growing privatization of the world's dwindling fresh water supply with an unflinching focus on politics, pollution, human rights, and the emergence of a domineering world water cartel."

The film was released in December (US import DVD only) and illustrates some mind-numbing numbers about the trading potential of water reserves:

• Of the 6 billion people on earth, 1.1 billion do not have access to safe, clean drinking water (www.charitywater.org)

• The U.S. Environmental Protection Agency currently does not regulate 51 known water contaminants (www.foodandwaterwatch.org)

• While the average American uses 150 gallons of water per day, those in developing countries cannot find five (www.charitywater.org)

• The water and sanitation crisis claims more lives through disease than any war claims through guns (www.water.org)

• According to the National Resources Defense Council, in a scientific study in which more than 1,000 bottles of 103 brands of water were tested, about one-third of the bottles contained synthetic organic chemicals, bacteria, and arsenic (www.nrdc.org)

• Water is a $400 billion dollar global industry; the third largest behind electricity and oil (Source: CBS News, FLOW)

"There are estimates that from five hundred thousand to seven million people get sick per year from drinking tap water" - Erik Olson, Deputy Staff Director of Barbara Boxerʼs Environmental and Public Works Committee (EPW)

"Californiaʼs water supply is running out – it has about 20 years of water left in the state" - Maude Barlow, National Chairperson of the Council of Canadians

"There are over 116,000 human-made chemicals that are finding their way into public water supply systems" - William Marks, author of Water Voices from Around the World

"In Bolivia nearly one out of every ten children will die before the age of five. Most of those deaths are related to illnesses that come from a lack of clean drinking water" - Jim Schultz, founder of the Democracy Center in Bolivia

"The cost per person per year for having 10 liters of safe drinking water every day is just US$2" - Ashok Gadgil, Senior Staff Scientist in the Lawrence Berkeley National Laboratory

I would seriously suggest you (a) watch the film and (b) invest in water as a rare commodity!

Hattip to Michael Pawlisz

Meanwhile, for the opposing view in a film, watch Kevin Costner's "Waterworld":

Finally, if you missed it, I recommend you spend one minute and just watch this:

It is truly amazing, from the new BBC series "South Pacific".

The EU's Response to the Financial Crisis

My friends at the Industry and Parliamentary Trust are running an important meeting on Thursday 11 June 2009 at Westminster Hall, the Houses of Parliament, London.

The meeting will focus upon the EU's response to the financial crisis and particularly on the EU High-Level Expert Group, led by Jacques de Larosiere, focusing on the reform of financial legislation in Europe.

Their report, highlighting the critical areas that will give impetus to better regulation with the aim of creating a more financially stable Europe, calls for the ECB to chair a proposed European Systemic Risk Council (ESRC) - a pan-European advisory council on financial risk that would be made up of ECB Governors, national supervisors from the financial sectors, and a representative from the European Commission.

This seminar will focus on the findings of this communication and the likely response of the European institutions with confirmed speakers including:

• Philip Dunne MP, Chair of the All Party Corporate Governance Group
• Olivier Girard, DG Internal Market and Services, European Commission
• Dr David Doyle, Senior Policy Advisor, Brunswick (expert in EU financial services)
• Steven Hall, Head of Financial Services, Confederation of British Industry
• Roland Rudd, Founding Chairman of Business for New Europe
• David Shirreff, Britain's Business Correspondent, The Economist

If you would like to attend this event, it costs £195 and you can book through Lynne McDowell.

Things worth reading: 25th May 2009

Things we're reading today include:

DTCC open to talks on LCH merger (Financial Times)
RBS chiefs handed £5m in bonuses (Times)
Brazilian bank develops taste for life in London (Times)
Wonga pushes web loan innovation (Financial Times)

Banks may miss key lending targets (Telegraph)
Brown to Bank: lighten up  (Financial Times)
British banks revolt against Obama tax plan (Telegraph)

Bank of Japan chief sees 'mild recovery' for Japan  (Financial Times)

Rising debt clouds market optimism  (Financial Times)
Reflect while the bears and bulls battle for dominance (Financial Times)

World Bank warns of social unrest (BBC)

The Finanser's Week: 18th May - 24th May 2009

Here are our key stories of the week:

• Robert Peston presents ...
• Stéphane Garelli presents ... 
• Alistair Darling presents ...
• The total view on SEPA and the PSD
• Bank makes a billion
• This firm is full of it ...
• Winners in Capital Markets Tech
• The Great Hargeisa Goat Bubble
• Weird Banking News

Robert Peston presents ...

Robert Peston, the BBC’s lead reporter on the banks throughout this crisis, presented a discussion I attended the other night.  Robert’s presentation was titled “The new capitalism: The cost of men behaving badly”.  He presented under Chatham House rules, so the summary below is purely my spin on what he said and not his words.

Stéphane Garelli presents ...

Stéphane Garelli was the keynote at last week’s conference on payments.  For those who are unaware, Stéphane made Davos what it is today and is a world authority on competitiveness.  Interviewing Stéphane before his speech, I asked him what he thought we would be talking about this time next year?  “Mass unemployment and hyper-inflation” was his answer.  Then he said, as a result of inflationary forces, the stock markets would see another major bull run and will rally back to record highs soon enough.  Here's the summary of the whole speech.

Alistair Darling presents ...

Alistair Darling, the UK Chancellor, was asked whether the UK Government's ownership of the banks changed the banks' activities?  Here's what he said: "There are going to have to be some changes in culture, and there are going to be changes in approach. The banks cannot just imagine that after everything is over we can just go back to business as usual."  Read the whole speech here.

The total view on SEPA and the PSD

At the payments conference last week, a major theme was the Payment Services Directive (PSD) and Single Euro Payments Area (SEPA).  Here is a complete summary of all the presentations and comments made about their progress.

Bank makes a billion

Like most of the banks, the Bank of England has made a bundle out of the credit spreads of the last six months.   In fact, over a billion pounds of profit.

This firm is full of it ...

I hear all sorts of rumblings about Merrill Lynch's unhappiness with Bank of America.  These two stories prove just how bad it is getting.

Winners in Capital Markets Tech

Inside Market Data and Inside Reference Data announced their Award winners for 2009, and we listed the winners here for those interested.

The Great Hargeisa Goat Bubble

BBC Radio 4 aired a fantastic 45 minute spoof play about the global derivatives market last week, with Stephanie Flanders starring.  The play was originally published as a short story in the Financial Times.  Here's the script from the original for those interested.

Weird Banking News

Two video clips of amusing news stories about financial services and banking this week.

And the biggest news stories of the week include:

Credit crunch has ended, according to Ted and Libor (Times)
Tim Geithner to reform US financial regulation (Telegraph)
New credit card limitations in US  (BBC)
China is preparing for a world where the yuan trumps the dollar (Telegraph)
China has long way to go to dislodge dollar (Financial Times)

Blank exit is a sorry end to HBOS disaster (Telegraph)
HSBC warns branch network 'uneconomic' (Telegraph)
Citigroup looks to slash tech costs (Financial Times)
HP cuts jobs as profits fall 17% (BBC)

Trader banned for concealing $10m bet after long boozy lunch (Telegraph)
Lloyds boss's account drained by Barclays thief (Daily Mail)

For stories by date, click on the dates below:

• 23rd May 2009
• 22nd May 2009
• 21st May 2009
• 20th May 2009
• 19th May 2009
• 18th May 2009

Weird banking news ...

US TV Channel CNBC is known for its serious financial reporting, but what the hell is CNBC's Jeff Macke smoking in this clip: 

Rumours are that he had ended his contract period with the news channel and this was his swan-song.

It is now!

Meanwhile, over on ABC News, bankers are in the headlines again, but this time for very sweet reasons:

How lovely.

Happy May Bank Holidays
(Monday is a national holiday here in Britain)