Par Yohanna Emkies (Tel-Aviv)
Rubrique: Banque & finance
Publié le 14 février 2010

Le système bancaire mondial, en pleine mutation suite à une terrible période de crise, serait-il en train de se rapprocher du modèle israélien ? Quelque peu simplifiée, la comparaison est tentante. La directive du Président Obama, visant à protéger le système bancaire du « too big to fail » qui a coûté cher à l’administration, implique une séparation des activités de dépôt et de trading pour compte propre (« proprietary trading »).

Israël, traditionnellement, fonctionne déjà avec cette distinction. Que peut-on apprendre du système bancaire Israélien ? Comment va-t-il devenir réalité pour les banques ? Vers quel modèle les banques vont-elles devoir se tourner ?

Un an après le pire de la crise, le bilan de la catastrophe financière est toujours mitigé. Les menaces de banqueroutes des géants financiers semblent se stabiliser, de grandes institutions financières, comme JP Morgan et Goldman Sachs, annonce de bons résultats pour 2009…

Toutefois la crise est-elle réellement derrière nous ?
Depuis 2007, les pertes colossales de l’industrie, subies en grande majorité par les banques, atteignent déjà $1 milliard et sont loin d’être finales. Les experts estiment que le gouffre atteindra bientôt $2.8 milliards. Au-delà des appels de capitaux gigantesques – assumés notamment par les gouvernements – les banques entament une véritable mutation de leurs modèles financiers et opérationnels, pour faire face à un avenir encore incertain. Incertitude aggravée par la déclaration Obama, qui a secoué les marchés en début d’année. Quelles institutions vont être touchées ? Comment vont-elles s’adapter ?

Limitées dans leur pratique de trading pour compte propre avant la crise, et donc structurellement moins exposées, les banques israéliennes ont relativement moins été ébranlées. Toutefois, la baisse des taux et le marasme financier ont entraîné une baisse sensible de leurs revenus. Tout comme le reste des banques mondiales, ne doivent-elles pas, plus que jamais, se réinventer ? —

ENGLISH VERSION – One year after the peak of the crisis, what is the outcome of the financial turmoil? Nearly collapsing, the financial industry has witnessed bankrupt of financial giant Lehman Brothers, the de-composition of the credit market, and incredible levels of losses. Yet with JP Morgan, Goldman Sachs and others announcing solid results in FY09, President Obama’s proposals of January has chocked the market. What is still ahead for banks here and abroad?

Since the start of the credit market disruption in 2007, the global financial industry has already recorded write-down and losses of $1,036bn (75% from banks), which is far from the end. So far, analysts say only 35% to 70% of the total losses have occurred. While the majority of losses to date come from falls in asset values, it is expected more significant losses to come from deteriorating credit quality, coupled with a decline in earnings. The total losses estimates across the FS industry are running as high as $2.8tn.

Forced to re-rate capital adequacy, banks have raised new capital as a buffer against current and future economic risks. In many cases, Government has been the provider of capital. $794bn of new capital has been raised across the banking sector, including significant infusions from government – particularly in the US and UK. Questions remain about the level of bank capital – JPMorgan analysts estimates that HSBC will need to raise up to $30bn new capital; Bank of America is rumored to be seeking additional capital to protect against anticipated losses at Merrill Lynch.

No one knows what the financial landscape will look like in the mid-term. In this period of transition and uncertainty, four different trends are under consideration, with potential differences between geographies:
- Firstly, all might return back to normal, providing economic conditions, risk management and market structures improve.
- Secondly, bank weaknesses may spur domestic consolidation and alliances and search for new opportunities through geographic expansion.
- More likely, a third scenario for the sector would be to go back to basics, which means maintained Government ownership, funding mostly limited to deposit growth, and as often in situation of crisis (or low growth), increased supervisions from regulators in an effort to control risk management.
- Eventually, banks will adapt their model, seeking growth while reducing operating costs. In order to reach customers through new channels, new products, development of self-service and direct channels, a whole new wave of innovative business models might be coming up.

We observe that all the financial institutions are reacting to the market environment and shaping forces by changing their financial and operational business models. Not an easy task, especially with Obama’s proposal which blurs even more the picture.

Basically, his decision to separate commercial banks from hedge funds and private equity funds intends to avoid creating financial giants. The “too big to fail” (55% of the recorded losses were concentrated in the top 5 firms) has obviously cost heavily to Governments.

But how will this work in reality? “This decision will mostly hit generalist banks – especially big ones”, says a broker of the Tel Aviv Borsa, “hence fostering commercial banks and hugely boosting hedge funds and small banks”. In the Western World – and especially since the repeal of the Glass Steagall Act (1933) in 1999 – banks are allowed to hold both investment and commercial activities. These Universal Banks would invest funds from commercial deposits into the capital markets. This is called proprietary trading activities. In France for instance, when millions of retail clients open accounts at Societe Generale, or BNP Paribas, they all together represent a huge capital for the bank to invest. In retribution, these banks charge relatively lower commissions and offer many services free of charge. This concept is now put into question.

“The very question is who this will apply to” says a trader from a London Hedge Fund, “Big hedge funds will not only remain, but they might even grow bigger, due to this measure. The risk of too big to fail is an old story – it already threatened the whole financial world in 1998 with the collapse of the LTCM fund. And it is not going to disappear. Most likely though, generalist banks will have to live without their prop trading revenues and turn back classic remunerations.”

Amazing fact, an interesting example in line with Obama’s proposition is the Israeli banking system! The Bank of Israel, traditionally conservative – its President Fisher has qualified of “encouraging” the Obama plan – already tightly regulates the trading activity of the local banks. What has been a hurdle for the 5 local major banks, stopping them from certain areas of revenues, has turned into a relative advantage during the crisis since their exposition was relatively lower. As it turns out, this system is about become a source of inspiration for global banks. But it doesn’t mean that the party is played for Israeli banks. They still have efficiency ratios way higher than their global competitors. Although Obama’s proposal will not drastically affect our system, the global economy crisis and low overnight rates (main source of revenue for deposits) are pushing it into tighter conditions. Today, more than ever Israeli banks have to find other ways to increase revenues, rushing into business innovation to acquire and keep every customer, while improving their structure to reduce operating costs.

Yohanna Emkies
Accenture | Consulting | FSI
11 Galgalei Haplada, Herzeliya, Israel
Office: +972-9-9619600
Mobile: +972-50-8447773

Yohanna.emkies@accenture.com