Specialists will define the future
Bob Diamond, chief executive officer of Atlas Merchant Capital and former CEO of Barclays, explains that while US banks are now well and truly safe, it is focused specialists and upstart technology companies that will drive innovation.
By Bob Diamond
For the major US banks, the pandemic has been the final step in a decade-long process to ensure the safety and security of the financial system.
In line with regulators’ hopes following the 2008 financial crisis, US banks are now well and truly safe, but with big financial institutions less able and willing to take on risk and innovation, we cannot rely on their scale to translate into productivity gains.
Instead, it is the focused specialists who are likely to redefine financial services.
The 2008 financial crisis was about vulnerability – banks failed or were deemed ‘too big to fail’. As a consequence, new rules for liquidity and capital levels injected a hefty dose of stability into the system.
Banks have evolved from being a cause of crisis to playing a supportive role in weathering the storm
The pandemic has tested the strength of the banking system with an economic collapse – and, so far, it has proven resilient.
Indeed, the banks have evolved from being a cause of crisis to playing a supportive role in weathering the storm and then helping to shape the recovery.