Wednesday, February 6, 2013

Meredith Whitney: Banks at a turning point




Whitney writes in the Financial Times: “….Since the financial crisis, many American businesses have increased their productivity – and they should be applauded for doing so. They got lean and mean. They reduced headcount, they eliminated waste and they shortened the supply chain. What have banks done against this backdrop? Very little. Headcount within the US financial industry is actually 150,000 higher than it was in 2007, when revenues were at their peak, according to SNL Financial.

“While the media has made a big deal out of the spate of recent lay-offs, my response has been: “What took you so long, and is this the best you’ve got?” Don’t get me wrong, I am never happy to hear about lay-offs. But the adage of “bigger is better” should be consigned to the rubbish bin. More regulation is here to stay. Higher capital levels are here to stay. Sure, they make operating a bank a lot less easy than it has been over the past 20 years, but if the US economy is – slowly – getting back on track, then so must America’s banking system. It is time that bank chief executives need to step up and show they really know how to run a business as effective operators all by themselves…..”

Read all about it at http://www.ft.com/intl/cms/s/0/b408916c-6b00-11e2-9670-00144feab49a.html#axzz2K8UZB2X8

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