Restructuring and Innovation in Banking (eBook)

Claudio Scardovi is a managing director and head of Financial Services for EMEA at AlixPartners. For the last 15 years he has been managing director for a number of companies including KPMG, Accenture, Intervaluenet, Oliver Wyman, Lehman Brothers, Nomura, and Advent. He is a professor at Bocconi University, at SDA Bocconi, and at Imperial College. A serial entrepreneur, he has written more than 200 articles and 13 books, published by Edibank, EGEA, Il Sole 24 Ore, Quondam, Mondadori, and Springer.

Preface 6
Contents 8
1 Creative Destruction in the Global Financial System 10
Abstract 10
1.1 The Gale of Creative Destruction 10
1.2 If Lehman Was just the Beginning 12
1.3 The Phoenix 14
1.4 Why Banking Is Different 16
1.5 If a SIFI Were to Fail 17
1.6 If a SIFI Needs to Fail 20
1.7 The Beginning of a “Bankaround” 24
1.8 Lehman Brothers, the Long Short 26
2 Fin Tech Innovation and the Disruption of the Global Financial System 29
Abstract 29
2.1 The Wave of Fin Tech Innovation 29
2.2 New Entrants and Disruptive Technologies 32
2.3 Breaking up the Banking Value Chain 37
2.4 Innovation and Disruption in Payments 39
2.5 The Distributed Ledger Technology and Challenge 44
2.6 Innovation and Disruption in Lending 45
2.7 Innovation and Disruption in Asset Management 47
2.8 Innovation and Disruption in Investment Banking 49
2.9 Innovation and Disruption in Insurance 52
2.10 Transform or Die (The Quick and the Dead) 55
3 An Approach to Bank Restructuring 58
Abstract 58
3.1 Bankaround: The New Game of the Game 58
3.2 The Unfolding of a Financial Crisis in Three Steps 59
3.3 Credibility Is Everything, and the Three Capitals 63
3.4 The “Bankaround” Approach, or RTX2 65
3.5 Restructuring 66
3.6 Turnaround 72
3.7 Transformation 75
3.8 Resolution 77
3.9 The Citigroup Case Study: Avoiding Nationalization at All Costs 78
3.10 The Hypo Real Estate Case Study: The State Footing the Bill 81
4 A New Resolution Regime in the European Union 84
Abstract 84
4.1 A Safety Net to “Let Them Fall Safely” 84
4.2 The Safety Net in European Banking 86
4.3 “European in Life, and National in Death”, No More 89
4.4 Resolution Versus Liquidation 91
4.5 Capital Ratio and the “Bail In”, from Tax Payers to Deposit Holders 94
4.6 Banca Marche: The Origins of Its Demise 97
4.7 Banca Marche: The Build up to Its Final Fall 98
4.8 The Resolution and Final “Burden Sharing” 100
4.9 Conclusion: The Bankaround to Come 102
Bibliography 106