The banking and financial sectors play a key role in allocating financing to economic projects and investments, from short-term needs to long-term operations. At its core, the transformation of private savings into private and public lending with a much longer time horizon has been complemented by the creation of derivative and financial innovation. At the same time, new entrants in the financing arena, such as institutional investors and sovereign wealth funds as well as a post-financial crisis tightening of regulations, are challenging the provision of long-term finance. Structural deleveraging and the recent trend towards the separation of traditional banking from investment banking put additional pressure on growth-driving investments and on this sector of the economy.
Assets of the largest 1,000 banks in the world grew by 4.8% to $113 trillion in 2013-2014, with European Union banks holding the largest share at $29 trillion. The United States reports approximately 7,000 institutions, Japan less than 150 and China concentrates a majority of banking activities in four banks. When compared to stock market or bond market financing, bank lending shows very distinct regional specificities. In France, bank lending relative to GDP is very high, while in the US, banking remains modest compared to the size of the economy. Central banks went through major changes affecting the volume of their balance sheet and their responsibilities since the last five years, with, for example, the creation of a single supervisory mechanism under the European Central Bank (ECB). They have also been directing stress tests and bank asset quality reviews.
The Global Agenda Council on the Future of Banking aims to provide thought leadership to the World Economic Forum’s Banking Industry community on the transformations the industry is facing, by providing vision and strategic insight for the long-term future.
Council Manager: Gilles Fuchs, Community Lead, Business Engagement - Europe, Europe Membership, Global Leadership Fellow, email@example.com
Forum Lead: Giancarlo Bruno, Head of Financial Services Industries, Member of Management Committee, firstname.lastname@example.org