From left to right: Kelly Evans, CNBC; Jamie Dimon, Chairman, President and CEO, JP Morgan; Anshu Jain, Co-CEO Deutsche Bank; Baudouin Prot, Chairman of the Board, BNP Paribas
Global universal banks face many challenges but offer unique benefits, said Co-Chief Executive Anshu Jain during a discussion panel at the Institute of International Finance in Washington DC yesterday. Among the challenges, Jain cited the forced narrowing of business models; continued litigation; requirements to reduce leverage and other regulation, and growing scepticism of the benefits of globalisation. Jain observed that the contract between the banking industry and society is bruised; “this contract is a vital asset which is missing from our balance sheets across the industry,” he noted.
However, Jain noted, global universal banks also offered unique benefits to society: outstanding diversification; a broad scope of risk management; strong global networks, and well-balanced funding and liquidity. To reap these benefits, Jain told his audience, global universal banks must address three key priorities: resolving the “too big to fail” question; restoring the bond of trust with society; and achieving the highest levels of efficiency in their use of resources.
In discussion on the impact of a federal government shutdown in the US, Jain warned of extremely severe consequences of a US default for the global economy, the value of US debt and for the dollar’s status as a reserve currency. “We would have hoped to see the Euro benefit from this, but at the moment there is no alternative,” Jain observed.
Also on the panel were Jamie Dimon and Baudouin Prot, Chief Executive of JPMorgan Chase and Chairman of BNP Paribas respectively.
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