The Banker Shorts – Week ending May 19, 2023

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Your quick guide to the week ending May 19, 2023, on

Last week, The Banker covered the greenwashing that plagues sustainable finance, asset management difficulties in the tough global economic environment, and the proliferation of digital assets in the traditional banking industry through tokenisation.

We shared opinions on the UK’s deposit guarantee scheme that has been thrust into the spotlight following the recent banking turmoil, and on why banks should take the low-value international payments space seriously. 

Our global coverage took us to Bolivia, where there is a brewing crisis surrounding the country’s dwindling international reserves, to Europe, where questions are being asked over the necessity of a digital euro, and to Qatar, which is considering its investment strategy following the country’s hosting of the Fifa World Cup in late 2022.

As part of our regular scheduling, this month’s Tech Vision brought you a conversation with Digital Economy Initiative co-founder Ijeoma Okoli. As usual, The Banker Board covered more key people moves.

And, if you missed it, tune in to the latest edition of The Banker Midweek for a discussion of the latest events in the banking industry with our editors.

Trending topics

The world has reached a tipping point where the trend towards sustainability has become irreversible. But how can investment banks ensure that their clients are not ‘greenwashing’ to access funding?

In the case of green bonds, says Rory Sullivan, CEO of Chronos Sustainability, a sustainable investment consultancy: “It is far easier to tell a story and to provide evidence in relation to a project. SLLs, in contrast, can be for any activity whether it is seen as green or not.”

  • Asset management plunge calls for a business model rethink – Joy Macknight | Click here to read

Boston Consulting Group’s global asset management industry report estimates that, given the existing pressures and market expectations, if asset managers stay the course, their annual profit growth will be approximately half the industry average of recent years (5% versus 10%).

It is no secret that banks were initially sceptical of digitally native assets such as cryptocurrencies. They saw them as being too risky and volatile.

“We had some serious concerns,” says Marion Spielmann, chief operating officer of banking divisions and custodian at DekaBank. “But we quickly understood the technology itself would be very helpful for the traditional business.

“Tokenisation is a wake-up call for the industry,” she continues. “It will change the business rapidly.”

The global private debt mountain has expanded over the past decade, with the world’s leverage now higher than pre-2008 levels. High levels of leverage could make firms vulnerable to shocks, especially in an environment of weak economic growth and higher interest rates.

Opinion sharers

  • Does the UK’s deposit guarantee scheme need reform? – Tom Aries | Click here to read

The reported $42bn bank run on SVB shines a light on the current compensation limits and speed in which it is paid out in the UK in comparison to the US. 

Whatever the answer is, it is clearly a balancing act. One thing seems likely: if reform is introduced, there will be a cost attached. 

  • Why banks have valuable capital in the bid to power low-value cross-border payments – Susana Delgado | Click here to read

Whether it’s a British teenager buying cosmetics via Instagram from a store based in South Korea, or a fabrics supplier in India selling to an Italian designer, our small purchases have a large impact. 

The importance of low-value payments should not be underplayed. They have strong potential for improving financial inclusion by benefitting groups such as developing nations that may depend on remittance flows.

Globe at a glance

  • Banco Central de Bolivia faces up to liquidity crisis – Barbara Pianese | Click here to read

“To solve the issues [of the central bank’s dwindling reserves] temporarily, Bolivia’s senate recently gave final approval to the so-called ‘gold law’ aimed at strengthening the country’s foreign currency reserves. It is important to stress that we are facing a liquidity crisis, not a solvency crisis.”

The digital euro project raises several questions: is the ECB’s approach appropriate? Is a digital euro even necessary? What are the potential benefits and risks for European citizens? How are euro stablecoins connected to this issue, and could they offer advantages, particularly considering they might be launched years before the ECB’s solution?

  • The World Cup’s socioeconomic legacy will continue to shape Qatar’s future – James King | Click here to read

Regular items

After leaving JPMorgan in 2022, Ijeoma Okoli founded the Digital Economy Initiative along with Toby Norfolk-Thompson. “I wanted to make sure that just because it’s crypto doesn’t mean it’s bad,” she says.

Last week on The Banker Board, we covered people moves at Santander Asset Management, Société Générale, Moelis & Company and Citi.

Sound and vision

  • The Banker Midweek | May 17, 2023

This week Barbara Pianese, Joy Macknight and Kimberley Long discuss the remarks the European Court of Auditors made towards the European Central Bank, whether European banks are safer than US lenders, and what the EU’s Markets in Crypto-Assets regulation means for banks.


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