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Redefining the bank

Over a quick lunch between conference panels at Euromoney's Borrowers and Investors Forum, held last month at the London Hilton Hotel, the treasurer of one of the biggest liability managers voiced his growing frustration with the slow pace at which leading banks and investment banks are embracing the internet.

His particular annoyance is over derivatives.

It would be enormously useful for his institution to be able to deal in a transparent swaps market, preferably with some kind of exchange-like margining facility to accommodate lower-rated counterparties, and ideally with automatic execution and efficient processing thrown in.

The treasurer had been doing the rounds of the banks asking how close their online risk management offerings, both proprietary and multi-dealer, might be to providing this. He had not been encouraged. His conclusion is that the hidden agenda of many banks that claim to be pushing the frontiers of e-finance is to obstruct and delay any real change being wrought by the internet. Loud announcements of web-based derivatives platforms with funky-sounding names are common. Ask when they'll be up and running and the quiet answer is this month, next month, sometime, never.

It's a sham.

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