Universal banking
By The Economist
From The Economist
Published: September 04, 2012
The enduring marriage of investment and commercial banking.
Aug 18th 2012 | from the print edition
OPPOSITES no longer seem as attractive. Universal banks combine the complexities of investment banking with simpler commercial-banking services for individuals and companies. Their proponents argue that the model offers the benefits of diversification, and enables banks to offer a full range of services to their clients. But even their backers are now having second thoughts. Sandy Weill, the man behind the mergers that created Citigroup, the archetypal universal-banking giant, surprised pundits last month by saying that megabanks should be broken up.
In doing so he joined a sizeable list of ex-bankers who seem to have experienced remarkable changes of mind once they have retired, options and bonuses doubtless vested. The converts include two former chairmen of Citigroup (John Reed and Richard Parsons) and David Komansky, a former chief executive of Merrill Lynch.
Their sheer size is not the only thing that makes people fret about universal banks. Many regulators and politicians see scandals such as the LIBOR rate-fixing allegations as evidence that staid commercial banks have been “contaminated” by the culture of the investment banks joined to them. The volatility of wholesale markets—think of the recent losses sustained on credit-derivative positions by JPMorgan Chase—also unnerves people.
Mervyn King, the governor of the Bank of England, said in June that he saw “real merit in pursuing the separation of this utility-type banking from investment banking”. There are calls in America for the resurrection of the Glass-Steagall act, a Depression-era law that split investment and commercial banking. BaFin, Germany’s national watchdog and Deutsche Bank’s home regulator, is reportedly examining the case for segregating the two types of business as well.
Some investors and analysts have also begun arguing the case for breaking up big banks. “You can slice and dice [the numbers] in many ways, but all conclusions mean these companies are worth more dead than alive,” says Mike Mayo, an analyst at CLSA, a broker. “It doesn’t necessarily mean you should kill them off but you should liquidate some bits.” Barclays and Deutsche Bank, for instance, are valued by the market at 30-40% of their book values. JPMorgan Chase trades at a narrower-but-still big discount of about 25%.
Not so fast. A very few universal banks have investment-banking arms with enough scale to stand on their own. But stand-alone investment banks face an even wobblier future than their universal-banking cousins. In the five years since the start of the crisis, the investment-banking arms of large international commercial banks have won a dominant share of key markets such as bonds, currencies and commodities (see chart). That is partly because the number of pure wholesale banks has gone down, but also because they face higher borrowing costs. That discrepancy is likely to widen after recent credit-rating downgrades hit Morgan Stanley, one of the last remaining investment banks, particularly hard.
And even if regulators and shareholders were to agree on a separation of the two sorts of banking, it is hard to unscramble the eggs that have gone into making them. Most universal banks with subscale investment-banking arms will neither find buyers (given the current slump in earnings) nor will they be able to wind down these businesses without incurring big losses.
Part of the problem is that investment banks may have entered contracts such as swaps or other derivatives that produce risks to the bank that can last 20 years or more. These positions are not easily sold, so their creators are forced to maintain teams of skilled traders and mathematicians to keep hedging, or managing, the risks to the bank.
Yet when a bank is winding down its business, it finds it harder to attract and retain people with the right skills. Labour costs soar, since banks must compensate people for the fact that they are working themselves out of their jobs.
The former finance director of a large universal bank says that when his institution looked at winding down its investment bank it “couldn’t find a glide path” that didn’t result in hefty losses. Instead it decided to keep pumping money into its investment-banking business in the hope that it would eventually grow big enough to compete.
Such problems suggest regulators ought to look for more subtle interventions than simply carving banks up. One example might be the “ring fence” approach proposed by an independent commission in Britain, in which banks would have to stump up enough capital and liquidity to support each business but not be forced to choose between them.
Another approach might be for regulators to specify how big investment banks can be compared with commercial banks. A senior investment banker suggests regulators and banks look to biology to judge the relative sizes of the businesses. “You have to say what is the host organism to which the investment bank is attached,” says the banker. “If you can keep the parasite in the right proportion to the host you can have a symbiotic relationship.”
from the print edition | Finance and economics
©The Economist Newspaper Limited 2012
綜合銀行應該被「大卸八塊」
2012-08-22 天下雜誌 504期 作者：經濟學人
近來，綜合銀行的弊案層出。銀行家、監管機構、投資人、分析師，紛紛提議應強制分離「投資」與「商業」兩種銀行業務。
「綜合銀行」的業務，除了有投資銀行的複雜度，也為個人與企業，提供單純的商業銀行服務。但現在，連他們最忠實的支持者也變心了。
上個月，綜合銀行龍頭、花旗集團前執行長魏爾 (Sandy Weill)發表「大型銀行應該業務分家」的言論，在業界引起不小騷動。
魏爾的同路人，還有美林證券前執行長柯曼斯基 (David Komansky)等。他們可都是在退休前，撈了滿滿分紅和股票選擇權的人。
事實上，愈來愈多監管機構與政客認為，商業銀行已經被投資銀行「帶壞了」。
近來，巴克萊銀行涉嫌操縱倫敦銀行同業拆款利率（Libor）的弊案，就是最好的例子。市場的巨幅變動也讓投資人不安。最近，摩根大通銀行就因信用衍生商品，而巨額虧損。
英格蘭銀行總裁金恩，也在六月呼籲「公用事業銀行，應該要和投資銀行的業務分開」。
美國不少人呼籲，回復大蕭條時期強制將投資銀行、與商業銀行業務分離的「格拉斯—斯蒂格爾法案 (Glass-Steagall Act)」。連德國聯邦金融監管局，也正研究類似方案的可行性。
投資人與分析師也跟著吹同調。「我們也許可以用不同的角度來看（這些數字），但最終的結論都是，這些銀行死了比活著還值錢，」一位里昂證券經紀人語帶譏諷。
他舉例，評估巴克萊銀行、德意志銀行的市值，大概只有他們帳面價值的三至四成，而摩根大通銀行則被打了七五折。
問題的癥結在於，投資銀行打的諸多衍生性商品契約，可能為銀行帶來二十年以上的風險。因此，銀行必須養一群交易員跟數學家，來幫他們規避與管理風險。
但銀行業務若是縮編，人力成本勢必愈來愈高，因為他們必須補貼這些員工將來失業的風險。
一位大型綜合銀行的前財務長，引述經驗表示，損失是銀行縮編的必要之惡。業務分家後，他們的資金仍繼續流入投資銀行部門，希望有一天會足以跟其他銀行競爭。
這些問題點，似乎在在提醒了監管單位，把銀行大卸八塊前，應先考慮衝擊較小的介入方式。英國銀行業獨立委員會提議的「業務分隔」，確保各事業體有足夠的資金與流動性，就是好例子。
監管單位也要觀察投資銀行與商業銀行，業務規模的比例。一名觀察者以生態學打比方：「掌握好投資銀行跟其母體的比例，寄生蟲與宿主也是可以和平共生的。」（劉光瑩譯）
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