This private half-day forum will bring together senior leaders from major international banks, insurers and regulators to explore the challenges of growth, stability and risk at the end of the credit cycle. Participants can expect a morning of lively exchanges and in-depth discussion on the global credit landscape, the impacts of regulatory changes in the US and Europe, and the impact of a volatile and uncertain geopolitical picture on risk outlook globally.
FT-Fitch Global Banking Conference 2019
Navigating the Late Credit Cycle
Sir Paul Tucker
Systemic Risk Council
Wells Fargo Securities
In Association With
The steady growth that banks and businesses have enjoyed in the last decade is slowing, and there is widespread feeling that a new, unspecified crisis is waiting in the wings. Central banks around the world are predicting the slowest growth rates since the financial crisis in 2009, and the European Commission has cut its forecast for Eurozone expansion due to “weak momentum”. Combined with falling business investment and greater caution amongst consumers in the world’s largest
economies, murmurs about a recession in the next twelve months are growing louder.
Central banks are already responding. The Federal Reserve, the Bank of England, the Reserve Bank of India and others are retreating from previous plans for multiple interest rate rises, pivoting in a markedly dovish direction to prolong the credit cycle. Looser monetary policy is expected to endure until there are signs of a renewed global upswing – but how likely is this at this stage of the credit cycle? What threats continue to simmer beneath the surface?
Global trade is decelerating sharply; gauges of Chinese business activity are softening; US confidence has been hit by new tariffs and the federal shutdown. What do geopolitical developments mean for the world’s major economies, and how can financial institutions navigate these changes? What can banks, insurers and other major players in the financial system expect in terms of new regulation? How can they balance emerging priorities and commitments with continued profit pressure?
Agenda - 4th Jun
8:00amRegistration and Breakfast
8:45amChair’s Opening Remarks
David Crow, Banking Editor, Financial Times
8:55amWelcome from Fitch
Kevin Duignan, Global Group Head for Financial Institutions, Fitch Ratings
9:00amIn Conversation with the FT: The Macroeconomic Outlook
Today’s uncertain global dynamic, in which international trade appears to be outweighed by deglobalisation, poses a challenge to the status quo of the financial system. The Bank of England has suggested that trade conflicts pose a greater threat to the global economy than a turn in the credit cycle or even a financial crisis. Political developments, profoundly interlinked with macroeconomic shifts, have a variety of credit implications.
Amidst ongoing tension between multilateralism and protectionism, what is the right balance of sovereignty and openness? How should banks, insurers, asset managers and regulators prepare for the possibility that countries will turn inwards, potentially undercutting growth and prosperity for all? And how can banks and investors predict nascent political shifts and mitigate their impact on credit?
James McCormack, Global Head of Sovereign and Supranationals, Fitch Ratings
Interviewed by David Crow, Banking Editor, Financial Times
9:30amPanel: The Lending Landscape
In the decade since the financial crisis, big banks around the world have been squeezed by tougher rules, forcing them in many cases to pull back from lending. With more vigilant regulators and a landscape pot-holed with risks, can banks steal lending back? And if so, have post-crisis measures been enough to reduce systemic risk?
With big banks unable or unwilling to lend to some parts of the economy, non-banks stepped into the void. But with fewer obligations to hold vast amounts of liquidity, and investors free to pull allocations any time they like, are non-bank lenders more susceptible to runs? If so, what will the consequences be as the economy tilts towards recession?
Bank consolidation: why is it necessary, what are the obstacles, and how much further does the sector need to go? How does it differ across regions?
Leveraged loans: how much of a risk does this growing market pose to investors, for example with the increase in ‘covenant-lite’ agreements? Should we expect a liquidity crunch if over-indebted companies struggle to make payments – or are the markets’ fears about them based on fiction rather than fact? Given the backdrop of loosening monetary policy in both the US and Europe, are leveraged loans really a more lucrative way to lend than high-yield bonds? How will a future economic downturn affect investors in this asset class?
10:15amMonetary Policy Keynote: Betting on a Bear
With inflation rising and policy normalisation underway, should the financial sector count on central banks as a backstop in the next crisis? How much of a dilemma does slowing global growth pose for central banks, particularly those already pursuing loose monetary policy? What is their next step to encourage a more inclusive and resilient global economy?
11:10amDual Interview: Does Activism Have a Role in Banking?
11:40amFireside Chat: How Much of a Risk is China?
Slowing growth in China has been highlighted by the Bank of England as a key risk to the global economy. China has enjoyed one of the longest credit booms in history – but does its unusual environment of ultra-high investment and rapid debt accumulation mean it is vulnerable to sharp decline? And if so, what impact would this have on the banking picture more generally?
12:10pmThe Coming Storm: Assessing Future Threats as the Credit Cycle Ends
When is the next crisis coming, what will cause it, and is the global financial system adequately set up to cope with it?
Systemic risk has moved out of the banks post-crisis. How should senior leaders assess new potential threats looming on the horizon? How likely is it that bond mutual funds or leveraged loans, for example, will be the catalyst for the next financial crisis?
What are the key elements of today’s shifting regulatory landscape? How will regulators respond to the end of the credit cycle, and can they protect the financial system from the coming storm?
NBFIs: what can banks expect in terms of action to monitor and regulate the activities of fintechs and nonbank lenders?
Risk mitigation 2.0: what legislation is needed to keep on top of money laundering, terror financing and cross-border financial crime? How should the industry tackle the fast pace of criminal development vs the relatively slow pace of new regulation?
12:55pmChair’s Closing Remarks
David Crow, Banking Editor, Financial Times
Who Will I Meet?
This event will gather over 200 senior executives from across banking and financial services as well as corporate treasurers and regulators.
Complimentary places are available to:
- C-Level executives including CEOs/CFOs/CROs/CCO/CIO
- Directors and Heads of Strategy, Credit, Research, Analyst, Debt Capital Markets, Capital Optimisation, Rating Agency, Capital Structure Advisory, Risk
- Senior regulators and policymakers
If this fits your profile, please register now for your complimentary place.
Sir Paul Tucker
Sir Paul Tucker is chair of the Systemic Risk Council, and a fellow at the Harvard Kennedy School. He is writing a book on the place of unelected power in democracies, contracted with Princeton University Press. Previously, he was Deputy Governor at the Bank of England, sitting on its monetary policy, financial stability, and prudential policy committees. Internationally, he was a member of the G20 Financial Stability Board, leading its work on too big to fail; a director of the Bank for International Settlements, and chair of its Committee for Payment and Settlement Systems. His other activities include being a director at Swiss Re, a senior fellow at the Harvard Center for European Studies, a Visiting Fellow of Nuffield College Oxford, and a Governor of the Ditchley Foundation.
CS Venkatakrishnan joined as Chief Risk Officer in early 2016. Venkat is responsible for helping to define, set and manage the risk profile of Barclays. He heads the risk management organisation across the group, has oversight responsibility for Compliance, and is a member of the Group Executive Committee. Venkat has 25 years of financial market and risk management expertise. He previously worked at JP Morgan Chase, from 1994, holding senior roles in risk, investment banking and asset management. He is the executive sponsor for Embrace, the global multi-cultural network at Barclays, and he holds BSc, MSc and PhD degrees from the Massachusetts Institute of Technology.
Karin Dohm heads the Government and Regulatory Affairs department of Deutsche Bank In that capacity she drives DB’s regulatory strategy and engagement with key regulators, politicians and other external stakeholders. She also leads the oversight and control over the implementation of key regulatory initiatives as well as the continuous reconfiguration of the Group addressing Deutsche Bank’s legal entity structure for operating and service entities as well as its booking model. Before taking on this role she was the CFO for the Global Transaction Banking of Deutsche Bank and previously she was the Chief Accounting Officer of DB Group. Before joining Deutsche Bank in 2011, Ms Dohm was a Partner at Deloitte. She has vast experience from more than 15 years as an auditor and tax advisor in transaction advisory services, optimising internal and external reporting processes and auditing the financial statements of clients such as financial services institutions, investment firms, as well as real estate and travel and leisure companies.
In addition, she represents Deutsche Bank in a number of industry related bodies, such as the Board of the European Financial Reporting Advisory Group (EFRAG), the Association of German Banks (BDB) and the European Banking Federation (EBF). Outside of DB, she is a member of the Supervisory Board and the Audit Committee of Ceconomy AG (formerly Metro Group), a publicly listed MDAX company. She is also Vice-Chair of the Supervisory Board and head of the Audit Committee of Deutsche Euroshop AG, another MDAX listed company that invests solely in shopping centres. Ms Dohm studied Economics, Politics and Philosophy in Münster, Saragossa and Berlin.
James McCormack is a managing director and Global Head of Sovereign and Supranational Ratings, based in London. He re-joined Fitch in 2013 from the Bank of Canada where he held a senior credit role. Prior to this, he spent three years with Goldman Sachs in Hong Kong where he was an executive director in credit risk management and advisory. Mr McCormack joined Goldman Sachs in 2010 from Fitch, where he held various senior roles in the Sovereign Ratings Group, including Head of the Asia-Pacific Sovereign team. Prior to joining Fitch, he was a country risk analyst for Export Development Canada and an economist for the Department of Foreign Affairs in Ottawa. Mr McCormack began his career as an economist at Wharton Econometrics (WEFA) Canada. He earned an MA in International Economics from the University of Toronto after gaining his BA at York University, Canada.
Cynthia Chan is Group Credit Officer for Global Financial Institutions in the Credit Policy Group. Her team is responsible for focusing on the largest credit risks in Fitch’s rated portfolio for banks, non-bank financial institutions and insurance. Previously, she was Head of the Credit Market Commentary team Fitch Wire, which offers rapid Fitch opinion on the most important events affecting the global credit markets.
Cynthia joined Fitch Ratings in 2005 in its EMEA Financial Institutions group, where she covered bank and non-bank financial institution ratings in the UK, Ireland and Netherlands. Prior to joining Fitch, Cynthia was an analyst at Credit Suisse and Goldman Sachs. She started her career at PriceWaterhouseCoopers. Cynthia graduated from Corpus Christi College, Oxford, and is a member of the Institute of Chartered Accountants in England and Wales.
Kevin Duignan is the global Group Head for Fitch’s Financial Institutions Rating groups. This group rates banks, finance and leasing companies, securities firms, investment managers, insurance companies and bond funds around the globe. In his role, Kevin is responsible for managing the global staff, overseeing all rating-related functions including criteria, research and analytical development, and for interacting with a variety of market participants. Kevin’s previous responsibilities at Fitch over the past 25 years include heading the Global and US Structured Finance efforts, heading global Corporate Communications and leading the US ABS group.
Before joining Fitch in 1993, Kevin was a manager and credit analyst in Citibank’s treasury credit department and mortgage conduit area. He received a BSc in management from Tulane University, Louisiana.
Nathan Flanders is a managing director and Global Head of Non-Bank Financial Institutions ratings group. He also heads up the Fund and Asset Manager ratings group. His areas of oversight include ratings assigned to securities firms, finance and leasing companies, traditional and alternative investment managers, business development companies, financial market infrastructure companies, money market funds, closed-end funds and bond funds.
Nathan was the US Head of Fitch’s Non-Bank Financial Institutions Ratings group until 2016, and prior to this held the role of US Head of Fund and Asset Manager Ratings group between 2008 and 2011. Since 2009, Nathan has also been a member of the Employee Benefits Committee, which is responsible for oversight of the company’s US employee 401(k) plan. Nathan earned a BA in Economics from Trinity College and an MBA from Columbia. He is also a graduate of the Hearst Management Institute, the executive training program of Fitch's parent company, the Hearst Corporation.
James Longsdon is a Managing Director in Fitch Ratings’ Financial Institutions group. He became co-Head of EMEA Financial Institution Ratings in 2010 and Head of EMEA Bank Ratings in 2018. He joined Fitch in 2000, initially responsible for bank ratings in Russia and CIS before moving onto developed market banks (UK and France) and EMEA non-bank financial institutions.
Prior to joining Fitch, James was an auditor in the financial services division of PricewaterhouseCoopers. He earned a BA in Russian Studies from the University of Bristol and has been a member of the Institute of Chartered Accountants in England and Wales since 1998.
FT Moderators (3)
Silvia Pavoni is the Economics Editor of The Banker, a monthly publication part of the Financial Times group, for which she has written on international trade agreements, sovereign debt crises, capital markets and financial technology. Ms Pavoni is in charge of The Banker’s Latin America section, the research behind the annual ranking of international financial centres as well as video and audio content for thebanker.com. She has reported from developed and emerging markets including Brazil, Mexico, Argentina, the UK and Hong Kong, among many others, with both written and filmed pieces.
As part of her role, she regularly interviews finance ministers, central bank governors, policy makers and senior bankers. She represents The Banker at various international events, including the annual meetings of the IMF/World Bank and the Inter-American Development Bank, and has chaired numerous conferences and panel discussions on banking, trade and investment. Previously, she was in charge of Centaur Media’s specialist database on public private partnerships, which was tasked with providing data to the UK Government. She has also conducted research for organisations such as the Italian Chamber of Commerce and Industry for the UK and the Italian Trade Commission. Ms Pavoni holds a BSc in Economics and Finance from Ca' Foscari University of Venice.
David Crow became Banking Editor of the Financial Times, based in London, in October 2018. He was previously the FT’s Senior US Business Correspondent, based in New York and covering primarily pharmaceuticals. Prior to that, he worked on the FT's main news desk in London, where he edited the front page of the print edition. Before joining the FT he was Managing Editor of City AM, the London financial newspaper. Mr Crow has an MA in English Literature from the University of Glasgow.
Stephen Morris is the Financial Times' European Banking Correspondent. He joined the FT in August 2018 after eight years with Bloomberg News, where he was UK Banks Reporter. Prior to that, he covered politics for the Independent. He studied at Durham and Cambridge universities, where he read history.
Presented By (2)
Fitch Ratings is a leading provider of credit ratings, commentary and research. Dedicated to providing value beyond the rating through independent and prospective credit opinions, Fitch Ratings offers global perspectives shaped by strong local market experience and credit market expertise. The additional context, perspective and insights we provide help investors to make important credit judgements with confidence.
Fitch Group is a global leader in financial information services with operations in more than 30 countries. In addition to Fitch Ratings, the group includes Fitch Solutions, a leading provider of credit market data, analytical tools and risk services; Fitch Learning, a provider of learning and development solutions for the global financial services industry; and BMI Research, a provider of country risk and industry analysis specializing in emerging and frontier markets. Fitch Group is majority-owned by Hearst.
The Financial Times is one of the world’s leading business news organisations, recognised internationally for its authority, integrity and accuracy. The FT has a record paying readership of one million, three-quarters of which are digital subscriptions. It is part of Nikkei Inc., which provides a broad range of information, news and services for the global business community.