What the world's banks will be doing in 2011

In celebrating The Banker's 85th birthday we have indulged a little in looking back over our long history. But more importantly we are using the occasion to look forward.

To help us take stock of the traumatic events of the past few years and project into the future, we asked chief executives, presidents and chairmen from banks around the globe to share their thoughts with us. The banks they represent all won awards in the The Banker's Awards 2010 so they have clearly done well in the recent past and should have strong ideas about what happens next.

The majority of these senior bankers feel the worst of the economic crisis is over. They highlight new growth areas and the prospects for diversifying revenue streams to reduce risk, implementing new technologies to streamline their businesses and their ambitions of international expansion.

Access to liquidity remains a sore point for some banks in the bigger, developed markets and they feel constrained by this as well as tighter regulation. However, many banks surveyed in emerging markets were barely affected by such problems, shielded from the worst of the downturn thanks to the hefty reserves that they held.

Emerging market economies have undeniably fared better than their developed counterparts during this time. Many of these countries are already driving global growth, nonetheless many interviewees from emerging markets expressed concerns about US and European governments applying quantitative easing measures that may adversely affect their economies. Some are forecasting that preventative measures will be needed to slow down capital inflows and reduce potential asset bubbles.

Whatever their geography, in order to avoid a repeat of the financial crisis, bank leaders agree that regulation needs to be proportional and they are concerned about micro-management of banks both by national and international regulators. While some top bankers perceive Basel III as a credible step in the right direction, others consider that the new recommendations do no go far enough, but as this survey shows, nearly all focus on the need to re-establish confidence and trust in the market.

What is your bank's number one priority for 2011?

Ammar Husain, CEO, Standard Chartered Bank Afghanistan
In 2011, we would like to place emphasis on expanding our domestic base and extending our services to the young but vibrant private sector in Afghanistan. The country has witnessed a spurt in private sector growth. Local entrepreneurs are coming forward on an increasing scale. The Afghan corporate sector is gradually taking shape, especially in sectors such as telecommunications, logistics, print and electronic media, to name a few. These developments have opened up new vistas for the banking sector.

Josep Peralba, CEO, Crèdit Andorrà
For the Crèdit Andorrà group, consolidating our international expansion is our number one priority to ensure sustained and sustainable growth. Our reputation and experience in private banking has opened doors for us in Europe and Latin America and we currently have offices in Switzerland, Luxembourg, Spain, Mexico, Panama and Uruguay. Our aim for the future is to provide a differentiated range of products and services that are tailor-made for our markets.

In the short term, we are planning to set up the basic map in Latin America of the jurisdictions in which we aim to operate. There are promising trends in the continent and we want to form part of their domestic markets. Our plan is therefore to go there and to stay, transforming the bank itself in this process.

Demetrios P Mantzounis, managing director and CEO, Alpha Bank, Greece
We have successfully navigated a very tough economic environment. In 2011, our low-risk balance sheet, along with our benchmark capital base and the careful management of our liquidity position, will enable us to maintain a solid operating performance from core banking activities.

Sean Morrissey, CEO and chairman, Budapest Bank, Hungary
For us, it is time again to identify and exploit growth opportunities. We believe in our current business model so 2011 will see us focus on the same things: continue coming out with new innovative products, new partnerships and improving service via our 'no-nonsense' banking approach, and striving for customer loyalty.

Samir Hanna, CEO, Bank Audi, Lebanon
The bank's top priority for 2011 is to continue its programme of overseas expansion with the aim of positioning the bank in the inner circle of major regional players. Among the immediate targets of regional expansion are Tunisia and Algeria, while also keeping strong interest in Gulf Co-operation Council countries. In addition, the bank is exploring opportunities in Turkey.

Notwithstanding a targeted presence in the UK, Bank Audi is considering applying for a branch licence for its French subsidiary, after it expanded to Gibraltar and Monaco last year. The bank is steadily growing towards its objective to become the most diversified regional bank by both business lines and presence in the Arab Middle East and north Africa region that still lacks a fully fledged, well-diversified regional bank.

Takashi Tsukamoto, president and CEO, Mizuho Financial Group, Japan
Mizuho's medium-term management policy through 2012 was launched, aimed at [achieving] sustainable growth. We continue to deliver the functions as a diversified financial institution for our customers through the best practices of our group's 'customer-first' policy and solidifying management infrastructure.

Damian Bell, CEO, ANZ Vientiane Commercial Bank, Laos
One of our key aims is to ensure we are giving our customers a truly seamless service across the Greater Mekong. We continue to meet this [aim] by drawing on the ANZ network to bridge markets, cultures, languages and regulatory environments. Importantly, we focus on industries we know, such as natural resources, agriculture and infrastructure, and providing our retail customers with products and services that help them meet their financial goals.

Walter Bayly, CEO, Banco de Crédito del Peru
[Our aim for 2010 is] to continue reinforcing the foundations for sustainable growth, especially in retail banking and mainly in micro-lending and consumer lending. We are truly committed to banking inclusion, which will lead our strategy to achieve such sustainable growth. Beyond this, we have designed a thorough and extensive plan to improve the way we do banking, which includes best practices in each and every segment of our business. We started implementing it in 2010, and will continue to focus on its execution in 2011. This is a year of execution, which we expect will also show some important results[.

Chartsiri Sophonpanich, president, Bangkok Bank, Thailand
From an international perspective, the previous decade promised rightly to be the 'decade of Asia' with the advent of the Association of South-east Asian Nations (Asean) economic community, including free-trade agreements with China and several other countries.

We already have a significant overseas branch network mainly in China and south-east Asia and wholly owned subsidiaries in China and Malaysia. Supported by excellent staff familiar with their local markets, and a growing network of more than 20 branches throughout Asia, our international lending already accounts for 18% of our total, and we expect this figure to rise further. As part of our strategy to strengthen our position in Asia we plan to expand our branch networks in China and Malaysia over the next year.

Mohammed Bin Yehya Al-Rowaishan, chairman, Yemen Commercial Bank
We are planning to increase our capital; we currently have a capital adequacy ratio of 18.74%. We are looking to increase the quality of loans and investment; focusing on types and quality of dealings and operating incomes will help the bank.

Sim Tshabalala, group deputy CEO, Standard Bank, chief executive, Standard Bank South Africa
Standard Bank's focus has become much tighter, with Africa and links to Africa at the centre of our strategy. We need to be able to connect to our cross-border clients, which is where our biggest opportunities lie. Our South African business remains central to this strategy.

Kenneth Micallef, head of the CEO's office, Bank of Valletta, Malta
We have three priorities: to grow the business, especially in niche markets where we feel we have significant competitive advantage; to protect asset quality in conditions of soft economic growth and fragile market sentiment; and to maintain high buffers of capital and liquidity in the run-up to Basel III.

Jamie Rivera, CEO, Banco Latinoamericano de Comercio Exterior, Panama
In the past 12 months, our loan portfolio has grown by more than 40%, driven by recovering trade volumes in Latin America and by our expanded presence in the corporate markets. During 2011, our number one priority will be to provide our new clients with an even wider range of trade services, thus diversifying our revenues and increasing profitability further.

Philip Sigwart, CEO, Procredit Bank, Kosovo
Our bank's number one priority in 2011 will be to increase the volume of our lending operations. The loan-to-gross domestic product ratio in Kosovo is less than 40% and there is still a lot of potential to grow.

Mike Smith, CEO, ANZ, Australia
In 2011, we expect Asia (excluding Japan) to grow at about 8% compared to less than 2.5% in the US and Europe. ANZ's 'super-regional' strategy differentiates it from domestic peers and offers a sustainable competitive advantage by linking the high-growth markets of emerging Asia with profitable and well-run operations in the more mature markets of Australia and New Zealand.

Where will your bank's future growth come from?

Alberto Valdes, executive vice-president, Banco Mercantil Santa Cruz, Bolivia
The loan portfolio, and the deposits from the public, will come from the retail part of the business. We are aiming at growing our non-financial income as well, starting new products that will help supply chains, and also by adding new services in our different channels and also for different segments.

Zhang Jianguo, president, China Construction Bank
While fortifying its strengths in medium- and long-term credit loans and housing finance, China Construction Bank will continue to advance its strategic transformation by injecting more resources to markets with decent growth. Specifically, it will promote integrated operations and increase contribution from emerging and non-interest based businesses towards bank-wide profit.

Fernando Naranjo, CEO, Banco Nacional de Costa Rica
We will look for a balanced portfolio of growing sources such as funding public infrastructure projects, housing loans (Banco Nacional has been a leader in this market since 2000), corporate lending and credit cards.

Jeremy Awori, CEO, Standard Chartered Bank Tanzania
The bank's future growth will come from deepening client relationships and moving from purely transactional activities to value-added and strategic product offerings, such as corporate and structured finance, equity, debt, custody and derivative products. Our unique international footprint enables the bank to facilitate the growth of international trade corridors between Tanzania and the rest of the world, and in particular Asia. Additionally, the small and medium-sized enterprise and retail banking segments offer significant growth potential for us and we plan to launch new products in liability, asset, foreign exchange and bancassurance lines. Ultimately, the bank is in a strong position to leverage its global capabilities with deep local knowledge.

Andre Sayegh, chief executive, First Gulf Bank, United Arab Emirates
First Gulf Bank will maintain its focus on building equity and increasing deposits along with consistent financial results in corporate, retail and treasury activities.

The bank's plan for the coming year is to uphold overseas expansion, [improve] global service standards, and continue to present complementary support to core businesses [through] subsidiaries and associated companies.

Corrado Passera, CEO, Intesa Sanpaolo, Italy
A key priority over the coming year is to maintain our core strategic foundations: sustainable profitability, a commercial banking-focused business model strongly oriented to the real economy, a successful track record in structural cost reduction, low leverage, a balanced funding structure and a low-risk profile all while continuing to provide strong shareholder returns. In addition, we see significant retail banking opportunities both in Italy and outside, keeping the focus on all of our core businesses.

Monique F Leroux, chief executive, Desjardins, Canada
We foresee higher market penetration of our wealth management sector and our insurance business [P&C and Life], across the country but particularly in Ontario and western Canada. We will also continue to look for business opportunities through partnerships and acquisitions.

Hans-Ulrich Meister, CEO, Credit Suisse, Switzerland
Across all our businesses in Switzerland we see significant growth potential. Our integrated approach and expertise are ideally placed to meet those requirements.

Swiss corporates compete at a global level and, with our global capabilities, we can help them grow; institutional clients increasingly seek advice on alternative investments and emerging markets and we are in a unique position to help them.

Private banking clients invest across asset classes and geographies and they want advice on asset and liability management. We are better leveraging our branch network for our affluent clients and we have invested in the more effective delivery of our expertise to high-net-worth and ultra-high-net-worth clients. In the next few years we will work on even more seamless collaboration, to capture synergies and to scale our integrated model.

Nguyen Van Le, CEO, Saigon-Hanoi JSWC Bank, Vietnam
In order to become a modern, multi-functional retail bank by 2012, Saigon Hanoi JSWC's business plan for 2011 will continue to focus upon increasing and enhancing the quality of retail banking products and services, to provide various packaged and convenient products and services to small and medium-sized enterprises, and to expand its market shares.

What strategies has your bank put in place as a result of the crisis?

Nadezhda Ermakova, chair of the management board, Belarusbank
The crisis revealed the necessity of client base diversification. The current priority strategies of the bank are to intensify co-operation with small and medium-sized businesses. With the liberalisation of Belarus's economy and the intensification of private initiatives, there has been an increasing demand for micro-credit. Belarusbank has been actively working with individuals and has the most extensive infrastructure to rapidly and professionally respond to those needs. By 'growing' business, we are expanding our client base.

Reijo Karhinen, executive chairman, OP-Pohjola Group, Finland
OP-Pohjola Group's low-risk bancassurance business model, backed by our strong financial position, allows us to continue pursuing our long-term strategic goals without major course adjustments. However, the tightening regulatory environment has, for example, prompted us to increase our covered bond issuance, and the fragile growth environment has necessitated stricter cost control.

James E Rohr, chairman and CEO, PNC Financial Services Group, US
PNC was well positioned throughout the crisis largely due to our moderate risk philosophy. We did not take undue credit or interest rate risks, so our balance sheet remained strong. Ultimately, we believe there are better, risk-adjusted ways to grow net income over time, and we will continue to pursue those [strategies].

Pedro Rodríguez Serrano, CEO, BBVA Banco Provincial, Venezuela
Our strategy has focused on offering differentiated services to each customer segment, developing new distribution channels with widespread coverage and simplifying key processes to primarily benefit our customers as the main source of growth and value creation.

Abdel Karim Kabariti, chairman, Jordan Kuwait Bank, Jordan
In the coming period, we will focus on diversifying our business activities, concentrating on financing small and medium-sized enterprises as well as our consumers' business. Growing our non-interest income will also be part of our strategy moving forward. That said, probably the single most important factor has been streamlining our operations through becoming a more cost-efficient enterprise.

Paul Brock, CEO, Kiwibank, New Zealand
We have sharpened our existing strategy and brought forward some funding and capital raising.

It made us change our focus from a strategy that was primarily looking at growth opportunities (both core and diversification) to one that was also focusing on ensuring we had enough fuel for growth (capital and funding). In addition to this we also focused more on working operationally harder, delivering on our promised budget targets - how could we work smarter to keep our costs down without impacting [upon] customer service. We have seen a clear opportunity for growth in the small and medium-sized business banking sector.

Ibrahim Dabdoub, group CEO, National Bank of Kuwait
Our overall strategy remains intact and rests on three pillars: regional expansion, a conservative and disciplined approach to risk management, and advancing our market leadership in Kuwait; it was vigorously tested during the crisis and proved quite successful. Our current focus is on consolidating and integrating regional activities to harness synergies and the benefits of scale.

Vekuii Rukoro, CEO, FNB Namibia
Our current strategic planning cycle began a year before the crisis hit the market. In essence, it entailed a focus on becoming Namibia's best bank. To communicate this approach throughout the organisation we coined the 'L2Pin3' slogan - meaning that FNB will move from the leading to the preferred bank in Namibia in three years' time. We re-communicated our vision, mission and values and our new strategic plan throughout the organisation through a structured cascading process called 'Project Sunrise'. In essence, the strategy is built on three pillars: people, customers and efficiencies. Only minor tweaks were required following the global crisis.

Douglas Cochrane, managing director, Scotiabank Turks and Caicos
Additional training has been completed with various staff seconded into our collections team, which offers Scotiabank more capacity to spend one-on-one time with our most financially affected customers. Scotiabank has also hired a collections specialist who is charged with ensuring we provide the best possible advice to our clients affected by the financial downturn. Our primary aim is to reach mutually beneficial solutions that allow our clients to remain in their homes with their families while minimising the number of non-performing loans in the portfolio.

Has your bank found it difficult to access financing?

David Wright, CEO, FNB Swaziland
The main source of funding for the bank is through deposits. We have seen a slight increase in corporate deposits due to the implementation of new legislation, which promotes local investment for companies within Swaziland. However, there has been a decline in retail deposits due to the challenging economic environment.

Maria Dolores Dancausa, CEO, Bankinter, Spain
Bankinter has been in a better position than the rest of the sector in accessing funding during a time of general difficulties. An example of this is the enthusiastic welcome given to the bank's capital increase to mitigate the capital impacts of the acquisition of insurance company Linea Directa Aseguradora. Furthermore, in the past three years, despite the difficulties of the capital markets for both the public and the financial sector, Bankinter has issued medium-term debt as covered bonds and senior debt, working ahead of future wholesale funds maturities.

Manuel A Grullón, CEO, Banco Popular Dominicano, Dominican Republic
During the recent economic downturn, our bank enjoyed excess liquidity both in local and foreign currencies thanks to our broad customer base and diversified sources of revenues, and was able to increase its capital base through high reinvestment of earnings by its shareholders and the issuance of subordinated debt. Our large portfolio of savings accounts and demand deposits provide low funding costs, which has become a competitive advantage. Through the years we have had strong support from our international bank correspondents and from North American and European agencies, with whom we enjoy long-lasting relationships and ample availability of credit facilities.

Alexander Dubilet, CEO, Privatbank, Ukraine
Since the main sources of our funding are retail [47%] and corporate [17%] deposits, while external borrowings are only about 7% of our funding base, the bank did not have serious difficulties to access necessary financing. However, the problem with Ukraine's financial system is real, though we expect improvements in 2011.

Piet Moerland, chairman of the executive board, Rabobank, Netherlands
The long-term funding budget, of about €25bn, for the whole of 2010 was already realised in the first six months of the year. We kept being active in the capital markets and already pre-financed a large portion of our budget for 2011.

Josep Peralba, CEO, Crèdit Andorrà
If we take into account the particular nature of our business model, the bank's liquidity, with a ratio of 71.06% on December 31, 2009, has historically remained at a much higher ratio than the legal minimum required in Andorra [40%] and is clearly better than the ratios offered by the financial industry at an international level.

We can therefore say we have more than enough liquidity to meet the market's needs without resorting to external financing and developing our international expansion with our capital.

Sean Morrissey, CEO, Budapest Bank, Hungary
We have been in a better position in this respect than most of our local competitors. Our longstanding conservative lending practices, and strong capital position and support of our parent company, GE, has enabled us to maintain a strong liquidity position. We are proud that we have been able to serve our customers' sensible financing needs throughout the past two years.

José Reino da Costa, CEO, Banco Millennium Angola
No, we have not. Banco Millennium Angola has seen strong growth in deposits in recent years, which along with support from Millennium BCP, the bank's parent company, has served to finance the investments made and loans given.

What are the key challenges facing your bank and your country's economy?

José Reino da Costa, CEO, Banco Millennium Angola
The main challenge facing the Angolan economy is that of reducing its dependence on the petroleum sector and the resulting exposure to the volatility of market prices for crude oil. In order to achieve this, the economy must diversify, increasing national production and reducing dependence on imports.

Thomas Ruhr, member of the management board of Erste Bank, Österreich, Austria
An ageing population and growing public debt are Austria's key challenges. The latter we will not be able to easily influence as a bank. However, the ageing population, [those over the age of 65] offers a great opportunity for cross-selling special services. In 2030 it is forecasted that 2.2 million Austrians will be over the age of 65 - today it is 1.4 million - and in 2050 there will be 2.7 million.

Besides customer growth, we will of course have to focus on cost management and revenue generation. Despite significant success in cost reduction in the past few years, further cost-efficiency measures are necessary and also possible - at Erste Bank - as well as at a savings banks level.

Christian Clausen, president and group CEO, Nordea
For us, as with most banks I would assume, the regulatory changes and the remaining [economic] uncertainties are the biggest challenge. We support regulations that are more efficient and can avoid new financial meltdowns, but it is equally important to avoid over-regulation and not to force the banking models that are stable to change.

Kevin Murray, chairman, Citibank Côte d'Ivoire
Growing competition in what is currently a small market place [Côte d'Ivoire]. Financial institutions are arriving with a vision of a country much different from what we see today. Until that vision becomes a reality, the competitive landscape will be strong but needs further growth to build on the momentum already gained.

Abelardo Pachano Bertero, executive president, Produbanco, Ecuador
[The key challenge is] working in an unfriendly business environment for banks set up by the Ecuadorian government, in which prices of the bank's loans have been fixed as well as the prices of the services that are provided to our customers, which are based on political rather than technical considerations.

M D Mallya, chairman and managing director, Bank of Baroda, India
Some of the key challenges facing our bank and India are the downside risks to growth coming from the slow and halting recovery in advanced economies, persistent inflationary pressures, increased intensity of capital inflows and its implications for the currency, and upward bias in asset prices - a common problem for all emerging market economies.

Djohan Emir Setijoso, president director, PT Bank Central Asia, Indonesia
Capital and liquidity will be a constraining factor that limits the growth of the Indonesian banks in the coming years. Looking at the need for infrastructure projects in Indonesia, the availability of capital and liquidity in the banking sector to support infrastructure development may be limited in the future. Furthermore, the quantitative easing in the US and other European countries might negatively impact upon the Indonesian economy and banks.

Ibrahim Dabdoub, group CEO, National Bank of Kuwait
Attracting and retaining quality staff is a challenge, especially as the demand for bankers continues to grow in the Middle East.

Kuwait's economy remains heavily linked to oil prices and diversification efforts have not materialised yet, which pose significant challenges for us to grow and diversify our business.

Richard P Young, managing director, Scotiabank Trinidad and Tobago
The challenges the local economy faces are also the direct challenges of the bank. Low consumer confidence in Trinidad and Tobago has resulted in a severe reduction in the country's demand for borrowings and excess liquidity in the entire banking sector. Despite less than encouraging economic statistics, we believe that Trinidad and Tobago can rebound for the spill-over effects of the global economic crisis.

Dmitry Orlov, executive president, Vozrozhdenie Bank, Russia
The Russian economy is highly exposed to commodity prices. The global economy is recovering very slowly - there are no sources for growth in demand for energy.

In these conditions we will have to redirect the economy towards consumer demand, and look for internal sources of economic growth.

This will give an impetus to industry, which will be recovering, responding to growing demand. Banks are prepared to lend now, but demand is needed.
What needs to be done to avoid a repeat of the financial crisis?

Jamie Rivera, CEO, Banco Latinoamericano de Comercio Exterior, Panama
All actors in the financial tragedy need to review their roles: bankers need to give credit risk considerations their due, regulators need to be proactive about systemic risk and leverage, investors need to approach financial institutions with a medium-term horizon in mind, and taxpayers must not allow their representatives to be driven into rash decisions.

Timur Ishmuratov, managing director, Bank CenterCredit, Kazakhstan
To avoid a repeat of the financial crisis, Kazakhstan, the largest central Asian economy, should develop its banking system without dependence on foreign borrowings, and rely mainly on internal funding. This will be at a slower pace but it is the sustainable development that the country needs now.

The regulator should be more efficient in guarding against excessive risk-taking in the financial system by increasing transparency of financial institutions and by making sure that institutions have sufficient assets to meet their contractual obligations, at the same time avoiding excessive regulation.

Financial institutions, on the other hand, should also reduce their risks by finding better solutions to asymmetric information problems, improving their corporate governance and by addressing any asset-liability mismatches.

Mazhar Rawji, chairman of the board of directors, Rawbank, Democratic Republic of Congo
Banks worldwide should be obliged to hold more capital in relation to the risks in their portfolio. The Basel III recommendations are too timid [at present] in this regard. Higher capital ratios will further protect savers and their deposits and shield future taxpayer-funded bailouts.

Vakhtang Butskhrikidze, CEO, TBC Bank, Georgia
Risk perception after the global crisis changed dramatically but the market may once again prove to have a short memory, thus the post-crisis lessons should be learned. However, this should not translate into radical over-supervision or micro-management of the banks by regulators either. Moving from one extreme to the other does not seem to be the best solution.

The general public should also be better equipped in valuing investments they book in order to avoid unpalatable risk-taking at their end, going forward. Alternatively, people should restrain from investing in instruments they do not fully understand.

Kenneth Micallef, head of the CEO's office, Bank of Valletta, Malta
Basel III is a step in the right direction, for leverage and liquidity are key to maintaining stability. We need to see better matching of asset and liability term structures. Another essential measure would be limits on bankers' remuneration. Compensation practices at large financial institutions have been identified as a factor that contributed to the financial crisis. Remuneration should not encourage excessive risk-taking.

Jüergen Fitschen, member of the management board, Deutsche Bank, Germany
The current economic situation is still affected by major uncertainties. There are pronounced differences in growth momentum across the globe. The international financial markets are also feeling the strain of a multitude of proposals and ideas - sometimes conflicting - on how to reform the global financial system and make it more resilient. While some issues remain entirely unanswered, the un-coordinated approach of individual countries in some areas is also a cause for concern.

Benjamin Hung, CEO, Standard Chartered Hong Kong
In the longer run, to respond adeptly to increased inflows, many countries should seek to deepen and broaden their capital markets, making it easier to absorb additional capital. Meanwhile, countries should also seek greater currency flexibility.

Alternative policies could include a further build-up of currency reserves, macro-prudential measures aimed at curbing property prices, counter-cyclical fiscal policy or encouraging outflows to offset inflows. Capital controls may be considered in the more extreme cases where hot money causes a currency to overshoot - appreciating too far too soon - and poses a threat to competitiveness.

Christian Clausen, president and group CEO, Nordea
First we need sound regulation on capital and liquidity to ensure sustainable business models and a level playing field. No bank should be able to circumvent rules. Then we naturally also need to take a clear responsibility within the industry to avoid any undue risks or unsound behaviour.

Emerging markets have never been more relevant. How probable is an emerging market bubble and what steps can be taken to prevent it?

Aldemir Bendine, chief executive, Banco do Brazil
The Brazilian financial system is well established and mature, having rigid regulation and consistent mechanisms to protect investors, banking customers and financial institutions. In the recent international crisis, Brazil went smoothly through the most critical period because of the coordinated measures adopted by the monetary authority and the Brazilian government. It is important to emphasise that the set of prudential measures that has already been undertaken by our authorities make us very comfortable with regards to the solidity of Brazilian financial market.

Benjamin Hung, CEO, Standard Chartered Hong Kong
Emerging markets account for one-third of the world economy but two-thirds of its growth. They could see capital inflows accelerating following the US Federal Reserve's 'quantitative easing' decision that could raise the risk of asset bubbles. Depending on their own fundamentals, emerging economies may use a combination of currency appreciation and macro-prudential measures to contain the adverse impact on domestic asset markets. Some economies may also consider capital controls but such measures need to be selective, targeted and temporary.

Anthony Withers, CEO, Mauritius Commercial Bank
The likelihood of an emerging market asset bubble would largely depend, inter alia, on the strength of economic recovery in advanced economies as well as the evolution of interest rates therein. Preventive measures locally could include a closer monitoring of capital inflows and a diversification of the range of products made available to investors.

Nazir Razak, group chief executive, CIMB, Malaysia
Since the Asian financial crisis, the Malaysian government has been advocating a comprehensive review of the global financial system to address its many shortcomings - especially the unconstrained flow of hot money and the bubbles that it causes. I am glad that these concerns are finally at the forefront of global dialogue. However, if we had been heard earlier, a lot of pain could have been avoided.

It is also good to see that bank regulators in many countries now move quickly to arrest possible bubbles. This is especially so in the property markets. I personally think that regulators have to intervene far more in banking markets than they do, even today, because excessive competition among banks has proven to be very dangerous for the economy as a whole.

Manuel Medina Mora, chairman and CEO, Citi Latin America and Mexico
So far, I do not think that the increase in the prices of emerging markets assets can be considered, in general, as the product of a bubble. Rather, they are the consequence of a secular trend, derived from the increased relevance of emerging markets in the global economy. Nevertheless, we have to make a careful analysis to detect the cases of specific asset bubbles in some emerging markets. We cannot ignore, for example, the possible effects of the US expansive monetary policy on global liquidity, exchange rates and the prices of emerging markets assets.

Ergun Özen, CEO, Garanti Bank, Turkey
The abundant level of capital inflows to emerging markets might lead to asset bubbles. The Central Bank of Turkey (CBT) has been taking necessary steps in order to prevent this outcome, such as increasing the reserve requirement ratio on both foreign exchange and Turkish lira liabilities and eliminating the interest on reserve requirement on lira deposits. Moreover, the CBT may use required reserve ratios more actively in the coming periods.

Dmitry Orlov, chairman, Vozrozhdenie Bank, Russia
It is true that each economy acts in its own interests, and this helps to create imbalances in the world economy. The US Federal Reserve is, in effect, printing money to stimulate demand in the American economy and avoid a deflationary spiral. But this money is flowing into emerging countries, creating the potential for bubbles in various categories of assets. The relaxed monetary policies in developed countries are supporting economic growth on the one hand and pushing real interest rates into negative territory on the other.

Investors are seeking the opportunity to preserve their funds by putting them into countries with positive real interest rates, primarily China and Brazil. These countries are keen to demonstrate demand for dollar assets, keeping their own currencies' exchange rates low, so that they gain competitive advantages in the export markets, where prices are denominated in dollars. To avoid this, it is necessary to pursue a concerted macroeconomic policy and to open up lucrative investment opportunities in developed countries. Although I don't know the recipe for this myself.

What one change locally do you think would most benefit your bank?

Berislav Kutle, CEO, UniCredit Bank, Bosnia-Herzegovina
Bosnia-Herzegovina generally needs better organisation of the country, in a way to simplify the governing structure and to start resolving the current political situation. Furthermore we hope for faster recovery from the recession, in order for the economy to build stronger momentum and to increase foreign direct investment to Bosnia-Herzegovina, with justifiably good investment projects.

For us, it would be a challenge to stimulate the positive changes in the business environment of the country and to take the concrete actions and measures, in order to improve the business climate and to create preconditions for significant capital investments essential for our country.

Arthur Ty, president, Metrobank, Philippines
One area would be an update of Philippine banking laws that can help lower intermediation costs and make the country's banking industry globally competitive. The financial system is saddled by high taxes and cost of operations caused by banking laws that have not kept pace with the times. Banks are likewise mandated to lend 20% to 25% to sectors that may not have eligible borrowers.

Vekuii Rukoro, CEO, FNB Namibia
The growth in dot.mobi functionality and the use of cell phones to connect people and offer new services is the biggest change that will continue to affect banking and thus FNB Namibia. It holds exciting opportunities to improve financial inclusion in Namibia and to drive efficiencies.

Syed Ali Raza, president and chairman, National Bank of Pakistan
Some of the changes that could benefit both Pakistan's economy as well as the bank would be greater trade liberalisation and investment flows. The increase in foreign direct investment as well as more access to the overseas markets for exporters would ensure a steady stream of foreign exchange that would help in reducing both trade deficits as well as fiscal deficits of the country. A higher local tax-to-gross domestic product ratio would also help to reduce government borrowings to keep inflation in check.

Anurag Dureha, CEO, International Commercial Bank Mozambique
Locally, the regulations should be made stringent to ensure that inward foreign exchange is routed through the banking system. This will help the importers, the banks and, finally, the country's economy.
Manuel Medina Mora, chairman and CEO, Citi Latin America and Mexico

In the short-term, the implementation of key structural reforms that could favour a stronger expansion of the Mexican economy and consequently, a more rapid expansion of middle classes would be beneficial. In the mid- to long-term, Mexico must continue to enforce the institutional framework for doing business: enforcing contracts, improving property registries, promoting more efficient judicial processes, and improving the security situation.

Ibrahim Dabdoub, group CEO, National Bank of Kuwait
Kuwait remains our largest market and the announced government development plan could be a significant opportunity for NBK and a major contributor to our growth strategy once that stimulus package, with major infrastructure projects, goes into the full implementation phase.

Aldemir Bendine, chief executive, Banco do Brazil
We believe that domestic changes are those that have been the most beneficial for us. The economic stability, the rise among income classes and the increase in the level of job creation have created a lot of room to improve the consumption of financial products, especially in the credit market. The loans-to-gross domestic product ratio is a proof of this: this ratio reached 47% in September 2010, up from 24% in December 2002. We expect this ratio to be near 70% in 2015. The main aspects that could benefit Banco do Brasil are the maintenance of the credit growth trend and the improvement in the income of families.

Guy Poupet, chairman and CEO, BRD-Groupe Société Générale, Romania
Locally, I think that the continuation of measures targeted at the reactivation of the Romanian economy would most benefit our bank's activity. Of course, governmental policies play a big part in this; programmes such as Prima Casa (First Home) - an incentive for those wanting to buy their first home with the help of a banking loan - and the incentives designed for the auto market, proved to have positive effects on the economy.

Ergun Özen, CEO, Garanti Bank, Turkey
Turkey remained solid during the recent global crisis with the support of a resilient banking sector. We believe that Turkey has long deserved an investment grade in sovereign ratings on the back of its rapidly recovering economy and improving debt dynamics. Such a rating upgrade will definitely help Turkish banks to reach fresh funds with a lower cost structure, and paves the way for a sustainable growth in penetration rates.

Alberto Valdes, executive vice-president, Banco Mercantil Santa Cruz, Bolivia
Bolivia has been growing mainly because of commodities prices over the past couple of years, therefore if commodities prices keep increasing moderately, Bolivia will benefit from gross domestic product growth, and therefore the bank will probably be able to ride with that wave growing in different sectors.

What changes globally will most help your bank?

James E Rohr, chairman and CEO, PNC Financial Services Group, US
We need more certainty. Although it is good to have a framework for financial regulatory reform, we have too many unanswered questions, including capital requirements and how enacted changes will affect our relationship with our customers and the products and services we provide. Nevertheless, at PNC we believe opportunities remain.

Roger Snelgar, managing director, Standard Lesotho Bank
Improved economic activity, globally. This would support our export market, create employment, improve foreign direct investment and donor flows, and stimulate infrastructural spend by government.

G L H Permaratne, CEO, Sampath Bank, Sri Lanka
The shrinking of overseas export markets, resulting from the world economic crisis, has been a key factor responsible for slowing down the credit demand of the Sri Lankan economy in the recent past. Hence, the speedy recovery of export markets is most welcome.

Douglas Cochrane, managing director, Scotiabank Turks and Caicos
A more robust North American economy would benefit Scotiabank in 2011. This is mostly due to the fact that the majority of tourist arrivals in the Turks and Caicos Islands come from North America.

Efthymios Bouloutas, CEO, Marfin Popular Bank, Cyprus
Cyprus will be a key beneficiary from the ongoing integration of emerging markets into the global economy, having strengthened its position both as a regional business centre as well as an emerging markets transactional banking hub. The evolution of transactional banking services to added-value advisory types of services will not only materially improve the profitability of the Cypriot banking sector and our group but will also have significant spill-over effects on local income levels and domestic demand.

Paul Brock, CEO, Kiwibank, New Zealand
Globally, New Zealand exporters will look to the developing middle class in China and India and the continuing strength of the Australian economy.

Reijo Karhinen, executive chairman, OP-Pohjola Group, Finland
The pressure for major structural changes as a direct consequence of the financial crisis has been relatively limited in Finland thanks to the soundness of the local financial sector. However, uncertainty around the economic growth prospects - coupled with reduced customer loyalty overall and calls for increased transparency - are forcing financial services companies to sharpen their customer value propositions in an increasingly competitive environment.

Nazir Razak, group chief executive, CIMB, Malaysia
The establishment of an Association of South-east Asian Nations (Asean) banking framework that is clear on what Asean banks can and cannot do in each country and how we are regulated across national borders in the region would probably most benefit us. Our synergy realisation is constrained by what we can do in each country and across countries.

Also, the development of an Asian credit rating agency would be an important change - one that would give an alternative Asian perspective to credit ratings. Credit ratings have a huge influence on flows of capital and I feel that Asian issuers are being disadvantaged. You just have to look at the history of China's credit ratings versus many Western countries that are today on the verge of bankruptcy.

Piet Moerland, chairman of the executive board, Rabobank, Netherlands
An improvement of the general economic and financial environment will be beneficial for the financial sector at large, and thus also for Rabobank. This requires a restoration of trust and confidence in the financial sector and the economy.

M D Mallya, chairman and managing director, Bank of Baroda, India
A well-coordinated policy action against 'protectionism' at the global level that can ensure strong, sustainable and balanced growth of the world economy would most benefit not just our bank but all financial institutions with strong international operations.

Thomas Ruhr, member of the management board of Erste Bank, Österreich, Austria
The most significant change that would benefit the bank would be global economic growth and a stabilising faith in the financial system.

Demetrios P Mantzounis, managing director and CEO, Alpha Bank, Greece
Greece has to keep up with the implementation of the major structural reforms that are taking place, for the benefit of the country and through this, the benefit of the bank. These reforms will help to release the significant growth potential of the Greek economy and will lead us back to the path of stability and prosperity.