Event Highlights

The Asian Banker Summit 2008
17-19 MARCH 2007

The Asian Banker Summit 2008 was largest ever

World-class forum on trends in risk, technology and cash, treasury and trade featured over 60 expert speakers who dazzled over 800 delegates in Hanoi from 17-19 March.

While The Asian Banker Summit has always been a forum for global leaders to interact with their counterparts in the Asia Pacific region, this ninth annual summit in Vietnam generated rich dialogue and interaction as decision makers contemplated the deepening effects of the global credit crunch. Concerns about the implications of the crisis hit home when the news broke that JPMorgan had offered to buy Bear Stearns for just $2 a share.

Pham Huy Hung, chairman of the Vietnam Banks Association and chairman of Vietinbank (formerly Incombank) welcomed delegates to the conference after which Nguyen Van Giau, governor of the State Bank of Vietnam, spoke of the opportunities and challenges accompanying Vietnam’s accession to the World Trade Organisation in 2007.

Senator Paul Sarbanes, co-author of the Sarbanes-Oxley Act, which U.S. President George W. Bush has described as the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt, elaborated on the environment that gave rise to the controversial act, namely the misbehaviour of companies such as Enron and WorldCom. “This [wasn’t] just a few bad apples; this [was] a systemic breakdown,” said Sarbanes. A similar situation has seemingly arisen today in the financial services world. 

But Kaspar Villiger, board member of Swiss Re and former president and finance minister of Switzerland, highlighted the need to return to basic principles such as rewarding integrity and seeking non-financial incentives. “If every supposed deficiency resulted in new regulation, [that would] lead to increased restriction of free spaces in the economy with fatal consequences for innovation,” he said, noting that if compliance becomes too complex, it runs the risk exhausting creative management resources.  

The Risk Management & Governance Conference

An inspiring welcome note from State Bank of Vietnam first deputy governor Tran Minh Tuan opened the Risk Management & Governance Conference’s bank-regulation dialogue. Building on rapid advances, the bank’s core objective is to create a safe, strong, and more efficient industry platform for onward growth and development.

Johnny Mao, chief risk officer at the Bank of East Asia, Hong Kong’s first to gain Basel II approval, explained the importance of close regulatory cooperation and that compliance and enhanced risk management benefits can go hand in hand. William Ryback, former Hong Kong Monetary Authority deputy chief executive and special advisor to the Korea Financial Supervisory Service, added that modelling alone is not enough and reminded industry players to keep sight of common sense risk testing and analysis.

V. Vaidyanathan, executive director of ICICI, India’s second largest private bank, illustrated the perils of taking business and product risks too far as he addressed who within banks is really in charge of risk management. He urged bankers to maintain a sensible risk-reward threshold.

In light of today’s fast changing and uncertain risk landscape, Westpac Bank chief risk officer Andrew Carriline explained the value of sustainability as a source of competitive advantage. He said that now, more than ever, institutions that deeply embed sustainability practices will be the ones that thrive.

Michael Hamar, group chief risk officer at National Australia Bank, highlighted the importance of enterprise risk management concepts in order to optimise shareholder value. It is an approach Hamar says helped the bank rebound from a troubled past and relies on a common risk and capital management framework to proactively assess risk and create competitive advantage.

The BAFT Asia Conference on Cash, Treasury & Trade

The Asian Banker was pleased to partner with the Bankers’ Association for Finance and Trade (BAFT) for the Conference on Cash, Treasury & Trade. William Ryback, the former deputy chief executive of the Hong Kong Monetary Authority set the stage by discussing the threat posed by the fact that only a handful of banks offer the majority of the world’s clearing and settlement services. Given the risks in the system and the difficulty of managing liquidity in North America and Europe, he advised thinking about contingencies and even developing alternative payment methods.

Discussing the experience of Japan’s counterparty and liquidity risk crisis a decade ago, Tsuyoshi Oyama, deputy director general of financial systems and bank examination at the Bank of Japan, felt that Japanese banks had learned their lesson and were keeping reserves adequate to save them from the crisis affecting banks in other parts of the world. But he still felt that the banks had overcompensated and not yet achieved the right balance of conservatism and dynamism.

Noting the relationships between global banks and local Asian banks, Yvonne Chia, group managing director and chief executive officer of Malaysia’s Hong Leong Bank, said the intense competition in the correspondent banking field has impacted profitability. But she said that there were still opportunities to fill gaps in service.

Asif Raza, head of trade and logistics management Asia Pacific at JPMorgan, noted that the impact of the credit crunch was frightening a lot of bankers, although he did still see opportunities in the increasing interest in syndicated facilities for developing markets. James Benoit, CEO of AfrAsia Bank in Mauritius, noted the same point, especially for the rapidly increasing flows between Africa and Asia.

The Technology & Operations Council Annual Meeting

The Technology & Operations Council Annual Meeting was packed with a room full of the most respected heads of technology and operations from leading Asia Pacific banks. In a lively discussion on mobile banking, H. Srikrishnan, executive director at YES Bank in India, highlighted the importance of client ownership. Patrick Chew, head of delivery, consumer financial services at Singapore’s OCBC Bank, discussed his bank’s strategy of using the mobile channel as a way to test new products before introducing them through more mainstream channels. But Charles Tan, chief information officer at Ambank Group, highlighted the need for banks to find a “sweet spot” for mobile banking, which he said has still been under performing as a channel.

In a session on core banking, A. Rajan, country head of operations for HDFC Bank in India, sparked debate when he shared his view that it is unrealistic to expect a system that offers best of breed for everything. Axel Winter, chief architect at GE Money, noted his view that getting the right technologists in place to implement a core banking system can be just as important as getting the right technology.

David Cook, general manager of operations at New England Credit Union in New South Wales Australia, drove discussion on operational challenges in transactional banking as he shared his bank’s experience using video technology to link customers in rural areas with specialised agents.

Professor Steven Miller, dean of the school of information systems at Singapore Management University, spoke at a session on business process reengineering and raised the point that the banking industry could take a cue from the manufacturing industry on implementing large scale process transformation.

Historic closing keynote

The closing keynote session “Unravelling Recent Episodes of Failure” saw a vigorous panel debate between a leading regulator, banker, risk manager and academic.

Professor Jayanth Varma, director of Axis Bank and dean of the Indian Institute of Management-Ahmedabad, provided an analysis of the “models of failure,” from Barings to Long Term Capital Management to Amaranth Advisors, which set the tone for the discussion. When asked who is to blame for creating a culture that can allow the buildup of catastrophic situations in once-respected institutions such as Northern Rock, Société Générale and Bear Stearns, the fascinating discussion produced one of the best-ever Summit closing keynotes sessions. “It is obvious management has failed the shareholders,” said Sir George Mathewson, the legendary former chairman of Royal Bank of Scotland, who noted that the growth of securitisation as an investment tool wasn’t accompanied by an increase in knowledge.

He said that current remuneration policies are a big part of the problem because they do not provide anyone with economic incentive to avoid risky investments, creating tension between executives and their shareholders.

Christopher Page, head of risk for ANZ in Asia Pacific and former chief risk officer at HSBC, said that risk managers are often merely perceived as “business prevention officers,” especially by investment bankers. “The problem is that risk heads don’t have access to independent directors and audit committees, which are closer to the CEO and business getters,” he said.

Steven Hoffman, senior vice president of banking supervision and regulation at the Federal Reserve Bank of San Francisco, touched on the importance of having a strong board of directors to help ensure solid long-term performance at banks. “In the U.S. it is expected that you have financially educated board members focused on the long-term viability of firms,” he said.




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Event Highlights
Asia’s next generation of bank leaders identified
The Asian Banker Summit 2008 was largest ever
The Asian Banker Summit Advisory Board
The Risk Management and Governance Advisors
The Technology and Operations Advisors
The Bank - Regulation Dialogue Advisors
The BAFT Asia Conference on Cash, Treasury and Trade Advisors
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