The Italian job, New York-style
What can be worse for a relationship manager at a commercial bank? A major customer asks you to lend it, say, $500 million, only for the relationship manager to be told by his boss that such an amount is beyond the lending limit for that account. And what if your bank has developed a niche in lending to certain sectors, such as Rabobank in food and agriculture, or Toronto Dominion in telecoms? At some point you might reach the sector lending limit, and your business rationale disappears along with all the mandates. Or you are the chief financial officer of a commercial bank, dealing with pressure from shareholders to increase earnings, while seeing your traditional lending business yield ever smaller returns. Hampered by out-of-date capital adequacy regulations, you see your business being usurped by the investment banks and their satanic tools of disintermediation: commercial...
