Taking action, delivering change
Analyse the changes

Angela Knight, Chief Executive of the British Bankers’ Association, outlines how the industry in the UK must change and adapt to new circumstances.

Nature, and the media, abhor a vacuum. This is why the British Bankers’ Association (BBA) continually finds itself so actively involved in so many current debates.

Unless we say something, the inference somehow develops that the substance of what has been said, alleged or proposed is correct. Decisions get driven by public commentary, emotion and prejudice; it is logic, clear thinking and careful analysis of the options that must be the key drivers in creating the solutions.

In normal times – and I look forward to experiencing more normal times – the role of a trade association is about being the centre of excellence for those matters that are of concern to its members and have the potential to impact the market in which they operate. It has to have first-class links with its key stakeholders, it has to be strategic, be able to develop policy, to bring competing views together, know when to concede and when to stay in an argument. It needs to be able to think ahead. It needs to know the right people and at the right levels and in the right forums – and it still has to operate in the public domain. The BBA aims to be such a trade body in both hard times and at all times.

Nevertheless, constructing the future is also about improving the stability of the banking industry and in turn this means regulation. Put two people from the financial services industry in a room together and it does not take them very long before they start to talk about regulation. Indeed, take one of them away and the individual left will probably continue to talk regulation to themselves and, most disturbingly of all, do it out loud!

On the back of a crisis as big as that of 2008 it was inevitable that there would be very significant regulatory change. Regulation is also costly though; it impacts on innovation, it can suppress economic growth, and it can affect the dynamics of competition both locally and internationally.

So, as we tread our path to the new normal, it is essential that there is a much improved impact analysis on each change, and on the changes collectively.

Those impact analyses should not just be about the impact on a bank but also the impact on the economy.

There has to be a process and a group that knits together the differing requirements plus those coming through the Financial Stability Board and others. There is a cacophony of proposals and requirements already and I have mentioned only a few. We do not expect perfect harmony, but a recognisable tune is necessary.

And at the same time our authorities need to look outward, and particularly to the Far East where the economies are moving strongly, where they have improved regulation and where the politics look much more stable. That is where the great competition for Europe lies.

We need brave decision-makers to adjust timetables and content if necessary, in order to get to that end point which we all desire of financial stability, economic recovery and good economic performance.

If we look forward five years and address the question of where we will stand, the answer must be that we stand strongly as an internationally competitive country in an internationally competitive region and a global leader. 

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