WE ALL AGREE IT IS NECESSARY TO SHAKE THE WORLD

Neel Kashkari, the most recent member in the Federal Reservation of USA, threw a bomb last Tuesday: the banks are too big and they would owe to cut ap. The bank lobby, like it was of waiting, it jumped, accusing him of "blind". But, although nobody wants that the authorities force them to break or to reduce their size, many bankers recognize that he would go them better if they were smaller and simpler. 

To the thread of this I am of those that he/she believes this way mainly it in Spain it is incredible that here in a country where there are almost so much debt like GDP that the official unemployment is by 21 percent but that it really overcomes the 25 where the most important national companies are manufacturers and all work outside of included Spain the banks, we have two sure systemic considered banks and three that come closer to this condition three systemic considered banks Santander, BBVA, the systemic ones and BanKia, Caixabank and Sabadell with some volumes that scare because one cannot be explained of where their “Core Capital" proceeds in a country that the consumption is for the floors and the credits practically don't exist.  

The problem that the business of the banking worries about now in general is that a restructuring of great soaked he could go bad, especially for the new regulations financial post-crisis. Six high different bank executives have assured to the agency Reuters that are suffering with the costs and the restrictions of those regulations, as well as for the weakness of the global economy and the problems in the financial markets. 

"The business has to change fundamentally", it recognizes a veteran banker that until recently it was part of the advice of a great European bank. The directive teams of the banking to both sides of the Atlantic are considering dramatic turns in their business model, but they find none of the options particularly attractive. They remember yesterday I told the same envelope the economy in general the times and mainly the globalization of the world makes jump for the airs the outlines of the century 20. 

Discarded the coalition, is not options. In the first place, the coalitions to reduce costs and to improve the margins are not on the given table the obstacles that would be on the part of the regulators, worried by new megabanks that were too big to fall. To divide their business is complicated by the capital demands that would make inviable economically the investment business besides because you grieve there are buyers in the market for the assets that he wants to place the banking. 

Before this panorama, many executives complain that alone they can crawl for what they fear that it will be a long and dark period of scarce benefits, mad shareholders and a reduction of the gradual business. These problems are so serious that some don't have repairs in recognizing them openly. John Cryan, CEO of Deutsche Bank, recently said in a public conference that would prefer to be the boss of a simpler bank, centered in the business retailer, as Wells Fargo that alone he has a small division of investment banking. "Unfortunately there are many things that he would want that they won't make reality." 

But it is that the bankers for what looks like each other mistake when judging their problems and they don't want to recognize that it is the same one that we suffer all there are no longer a rich world and another poor person already everybody it is an everything and that changes the norms and performance systems completely that up to now were their Bible. Today a company of Malaysian doesn't need a bank it USA he has its banks and the same Japan or China is now they are the banks of the western north hemisphere those that go to Asia to look for money and clients that to please. And with everything and with that they continue being too big 

The words of Kashkari, their first ones as governor of the Fed of Minneapolis, were a surprise since he is former executive of Goldman Sachs, republican and it was part of the Treasure of USA during George's command W. Bush in the beginning of the financial crisis. Kashkari also assured that the petition that the banks have a "testament" in such a way that you/they could be dismantled orderly in the event of crisis it won't simply work and they will end up being rescued again. In this sense, it asked him to be forced to the big financial signatures to increase their capital ratio "aggressively" although the banks fight to avoid that it happens, but it is that this measure is impossible because the capital every time is more distributed. 

While, the experts of the industry assure that the banks are in a committed position because the movements that made in the past to improve their profitability are now those that are being objective of the regulation. The result is that they have not gotten during years a return on the capital (it GNAWS) above a digit. Some of my readers remembered that once it indicates that the western capitalist world had changed the industry manufacturer for the financial industry, and this it is today's problem the financial industry it doesn't really produce anything the money this the continents that continue or they are now you manufacture them industrial of the world. 

In some way, the banks have become bad utilities (companies that give a regulated public service, as the electric ones or the energetics) ", Fred explains to Cannon, analyst of KBW. "With the utilities you have a strict regulation on what you can and what you cannot make, but at the end the investor obtains a reasonable return. With the banks, this last part has disappeared". The executives of the bank argue that the problems of benefit are a question 'recurrent' and that they should disappear when the markets recover. But while the industry comes closer to the eighth year since the financial crisis exploded, the doubts on if its problems are structural more than recurrent they continue growing. 

And many bankers wonder how they can make grow the benefits in a regulatory environment that limits what they can make and that he sometimes sends even contradictory signs. In this new scenario, the European banks go more retarded than their American homologous, but it seems that the only solution will be that they become smaller, like Rob explains to McDonough, advisory of administration of risks of Angel Oak Consulting Group. It is "too expensive to be big", it concludes. They already come it, I said that it was necessary to change the basic concepts of the economy and now from the bank system they say that it is also necessary to change the bank system and it is that in the bottom they go united.