The Banker Shorts – Week ending March 17, 2023

Our Banker Shorts are organised slightly differently this week, given the wide variety of industry events that added to our normal coverage of insight and analysis of the global banking industry. 

The collapse of Silicon Valley Bank, as well as turmoil at Credit Suisse, led our banking coverage. However, that didn’t stop The Banker from releasing the Top 100 US Bank rankings, as well as examining the end of Libor and the ongoing impact of Russian sanctions on the industry. Environmental, social and governance (ESG) and sustainability issues were well covered and we continued with the second instalment of our “Views on…” series looking at embedded finance. 

Our global coverage extended to Egypt, Pakistan, China, Nigeria and South Africa and our weekly people moves column — The Banker Board — continues.  

Global banking turmoil

• The Silicon Valley Bank collapse and Credit Suisse’s last-minute lifeline — Anita Hawser | Click here to read

“We learned a lot out of the global financial crash — multi-dimensional stress testing,” says Damian Handzy, managing director for performance, analytics and risk at investment management specialist Confluence. “But not everybody is doing that. Hopefully SVB is the 0.1% that fails spectacularly, but it’s a reminder that good risk management practices are insurance. If you don’t have robust risk management procedures in place, it’s not going to help when times are more difficult.”

• Credit Suisse shored up by central bank — Joy Macknight | Click here to read
• SVB’s CRO scandal should have rung alarm bells — Farah Khalique | Click here to read
• What are the lessons from SVB’s failure? — Joy Macknight | Click here to read

Rankings

• The Banker’s Top 100 US Banks 2023 — Joy Macknight | Click here to read

The US banking sector has been shaken this year by the recent collapse of Silicon Valley Bank following a $42bn run on the bank, the regulator’s takeover of Signature Bank and the $30bn injection into First Republic Bank by the largest US banks, all with large exposures to the tech start-up industry. Deposit flows and deposit costs are likely to garner more focus this year, as most banks experienced a third straight quarter of net deposit outflows, predicted Fitch in a January report.

Trending topics 

• Russian sanctions: a cat and mouse game — Anita Hawser | Click here to read

Sberbank may be cut off from Swift, but according to George Voloshin, a global anti-financial crime expert at the Association of Certified Anti-Money Laundering Specialists, it can still access Russia’s national payment system, the Financial Messaging System of the Bank of Russia, which it is using “aggressively” to send money to friendly countries.

• European banks still in Russia: should they stay or should they go? — Anita Hawser | Click here to read 
• Libor’s final days — Patrick Mulholland | Click here to read

Sharing views 

• Views on… embedded finance: “Moving fast and breaking things simply does not work in financial services” — Liz Lumley | Click here to read

“New tools are needed to bring software and financial services together,” Alex Mifsud, the CEO of Weavr tells The Banker. “The present tools — banking as a service (BaaS) and open banking — fall short: BaaS is complex to use and requires taking on responsibilities that many software companies are ill-equipped to do, while open banking provides only meagre capabilities for fully embedded digital experiences.”

Focus on ESG

• BNP Paribas lawsuit serves as a warning to wider industry — Philippa Nuttall | Click here to read

“It is not that important whether they win the case,” says Jean-Charles Jaïs, a dispute resolution partner at Linklaters in Paris. “It will take two to three years before the decision is rendered and to some extent, they have already won with the publicity surrounding the action and the communication impact.”

• ESG ratings: the case for reform — Maria Lozovik | Click here to read
• How financial institutions can keep up with ESG requirements — Frederik Winter and Kim Rybarczyk | Click here to read

Globe at a glance

• Egypt’s economy faces the music — John Everington | Click here to read

“After the previous crisis in 2016, portfolio flows helped maintain stability in the foreign exchange market, meaning there was less urgency to attract foreign direct investment,” says Mohamed Abdel Kader, country head for Citi in Egypt. “This time investors are going to want to see the foreign exchange market flexibility stabilising and generating enough liquidity before coming back in.”

• Egyptian economic reform: a clear path or a bumpy road? — Ziad Bahaa Eldin | Click here to read
• Pakistan's economy unravels — Barbara Pianese | Click here to read
• China moves towards TLAC launch — Kimberley Long | Click here to read
• Challenges ahead for Nigeria and South Africa as they join FATF grey list — James King | Click here to read

People moves 

• The Banker Board — March 16, 2023 — Simon Duffy | Click here to read