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Emerald Group Publishing Limited
Copyright © 2000, MCB UP Limited
Looking forward to the future
Looking forward to the future
It is spring. It is time to look to the future. And that is exactly what this issue of Balance Sheet strives to do. There are extensive sections on the future of software, the future of banking in an e-business world and the future of derivatives. For anyone working in the fields that this magazine covers there are astonishing changes and opportunities all around. We have tried to make this issue of Balance Sheet a comprehensive guide.
First up is Bill Robinson. He enthusiastically points to a major change in the UK market as a combination of tax changes and economic changes have led to an astonishing turnaround for UK finance directors as they now pursue debt rather than equity finance. As a past special adviser to the Chancellor of the Exchequer, Robinson is well placed to describe what he thinks is a 'sea change' in the world of corporate finance. Then Richard Cookson of The Economist takes a look at how banks are going to fare as e-business changes their business utterly. He thinks that, once they have learned a few lessons, they will survive. But they will look very, very different.
Then the sparky tones of John Ashenhurst hit our pages. John probably invented the role of iconoclast in the banking world and he puts his principles into practice as he savages the Basle proposals. They could simply result in nothing more than further risk, he suggests. Which is not precisely what was originally intended.
Then, in a major contribution to the debate, Dr Thomas Garside and Peter Nakada of Oliver, Wyman & Co provide a guide for accurately calculating economic capital figures. They take the Basle proposals as their starting point and assess how good current risk measurement tools really are. Then Julian Leake of Arthur Andersen contributes an overview of the benefits of risk-adjusted performance measurement.
The future of software moves stride by stride with the asset and liability management world and our special section in this issue provides an update to the latest developments. Joe DiRollo of DiRollo Jackman deals with the thorny issue of whether financial institutions should go for an established model or build their own. Always, he suggests, fit your product to your requirements and not your requirements to your product. Charles Palmer of Richmond Software then assesses change in the treasury systems market and Midas Kapiti provide an international case study.
The theme of the UK Asset and Liability Management Association (ALMA) conference in January was that of e-commerce. And the theme was taken in its widest sense. John Maloney of KPMG, who facilitated the discussion and break-out sessions, provides an overview of the central issues. Then we report in full on the conference presentations, debates and its wide-ranging conclusions. Finally in this section Paul Williams and Andrew Whitton of Arthur Andersen, the firm which has worked most closely with the Financial Services Authority in developing the rules for the future, provide a guide to the regulatory hurdles faced by e-business in the financial sector.
The boundaries of risk management are widening and being re-defined all the time. A major step forward in research efforts is the creation of a Centre for the Analysis of Risk and Regulation (CARR) at the London School of Economics. Richard Anderson of PricewaterhouseCoopers, whose joint venture the Centre is, looks at the issues on which the centre will be focusing.
One of the major contributions to the understanding of derivatives and the future of banking was the publication of Alfred Steinherr's Derivatives: The Wild Beast of Finance. Now he has revised the text and published a new edition covering the turbulence of the past year. We are proud to publish an exclusive extract in which he looks at the future of banking.
It is not only other people's money that we are all interested in. We carry the latest salary survey prepared for us by Robert Walters on asset and liability management earnings around the world. Then, to finish on a possibly fizzing conclusion, Robert Bittlestone, managing director of Metapraxis, has penned a curious conundrum for our 'Offshore' section. It carries a powerful message for the banking world, but also contains a few puzzles. Bittlestone is offering a case of champagne to the reader who first unravels his strange web. And that, in spring, seemed a good and optimistic finale for this issue.