Changing of the guard
Raiffeisen stresses commitment to CEE
Mervyn King has not had the best of times. His critics have attacked him for his slow response to the banking and economic crisis that has struck the UK. But the governor of the Bank of England has made one of the more telling remarks of this crisis. He observed in the aftermath of Lehman Brothers’ bankruptcy and the failures of Iceland’s lenders that many banks today are "global in life but national in death".
King’s comment goes to the heart of a debate among politicians, supervisors and financiers about the scale and scope of banks.
That debate will take some time to be resolved. "We’re in a remarkable state of flux, the consequences of which will play out over the next two to three years," says Tim Plews, a partner at Clifford Chance in London.
One outcome already clear, however, is that global finance is undergoing dramatic change as banks cut credit lines, scale back their businesses and withdraw from certain markets and products.
In April, for example, the Bank for International Settlements announced that cross-border lending by banks shrank by $4.8