Global Outlook On Financial Institutions Presents a Healthier Future

Dec. 18, 2012 - PRLog -- J. Christopher Flowers, an international specialist in financial services spoke on matters relating to the future of Financial Institutions globally at the London Business School Thought Leadership forum in Dubai.

The event follows a series of events that have been hosted by the MBA School. This forum, hosted together by the Coller Institute of Private Equity and London Business School, was moderated by Ann Iveson, a senior advisor to the Coller Institute of Private Equity. Both her and Mr. Flowers conversed about the foreseeable future for Financial Institutions such as Banks and Insurance companies that have been hit hard during the Financial crisis. The talked about what this experience taught the Key stakeholders and regulators as well as the future of Europe and the Euro, as well as an overall Economic and Financial Landscape including the part played by Private Equity.

Mr Flowers said, "One thing I think, which is not necessarily a common opinion, is that eventually, and let's say by 2020 as an example, financial institutions and returns on capital and profitability for financial institutions will return to normal".

"Not everybody thinks that and there are those in the financial institutions industry who think that we are facing permanently low returns on capital. I don't see it that way. The reason I don't think that is going to happen is that these industries are absolutely essential to the functioning of the economy. It is necessary that more capital flows into these industries so they can provide the financing the economy needs, and that will require higher ROEs."

With regards to the Euro he added, "I've been through many ups and downs in the economy, but to have this situation of whether the currency will persist or not is a very unusual issue. If a country leaves the Euro, most banks in that country and some in others will go broke. And that will be calamitous. We think it's highly likely the Euro will hold together. If it doesn't, it's really going to be a disaster."

He further continued to discuss the current financial services scenario and the regulatory behaviour that would be adopted and proposed what should be done. He said, "More than any time in a long time financial institutions have to make decisions about what businesses they want to be in".

"I think now more than ever there is a shift where there is premium on excellent management. Of course that is always important but at a time that is as tricky as this, there will be broader dispersion of winners and losers. A lot of that is the cards they start out with. Not every institution has the right cards but it's also a lot about making the right choices."

The event included alumni of the MBA School as well as big Corporations such as Barclays, Bank of New York, Citigroup, Commercial Bank of Dubai, First Gulf Bank, HSBC, ING Investments, JP Morgan Chase, Morgan Stanley, Standard Chartered and Price Waterhouse Coopers.

For more information, please visit; http://www.london.edu/programmes/mba.html