The BIS released came out with a list of 'systemically important' banks.http://www.bis.org/publ/bcbs207.htm
So, we now officially acknowledge that whatever happens, even if some countries go down, these banks cannot afford to fail. It reallymeans that whatever these banks do, we have to accept with grace and humility. It doesn't help that many of these giant institutions
are actually owned by the governments of their country.
I found a fascinating common theme across all these banks; they are all pruning down their retail banking business. Once would have thought that with the great credit crisis brought about by the investment banks would take these banks back to the basics
of retail and conventional banking. But no, almost all of them are scaling back on retail banking!
Biggest examples are HSBC, Barclays and RBS who are engaged in a fire sale of retail portfolios across the world.
Me thinks this is the worst trend in recent times and somehow the analyts don't seem to be getting it. Any slow down in retail banking only means less credit to the SMEs and consumers and only will prolong the recession.
I think it is time for the G 20 and BIS along with Central Banks of its member countries, to mandate minimum levels of growth in retail banking and retail lending/credit. Even better, should think of proportion of revenues that should be compulsorily coming
out retail banking and not from investment banking.
Too big to fail cannot translate to Too big to Retail.......