On the face of it, 2014 was supposed to be a good year for the financial sector. The global economic recovery should have taken hold, concerns about eurozone asset quality were to be resolved by the European Central Bank (ECB), and regulators were to complete the post-crisis architecture to build a safer financial system.
In truth, those expectations have been largely fulfilled. When Ben Bernanke announced the tapering of quantitative easing (QE) by the US Federal Reserve in May 2013, markets were seized by uncertainty. And yet, the process was completed in October 2014 with barely a tremor. Speaking at the Institute of International Finance (IIF) annual meeting in October 2014, Morgan Stanley chief executive James Gorman said the normalisation of US monetary policy should not hold much fear for the market, because it signalled growing economic strength.
