Banking on a bail-out

Article Abstract:

French bank Credit Lyonnais is on the verge of collapse. The government-owned institution has been surviving on bailout packages since 1993, costing each French household about 165 pounds sterling to date for a total of two billion pounds. This figure does not include the latest rescue plan reportedly worth 1.3 billion pounds. The bank's problems have been caused by poor management decisions which led to huge investments in the property sector and to a huge portfolio of loans to small and mid-sized French companies. Analysts also blame the French 'sacred cows' law which restricts the commercial banks' opening hours and protects the special status of savings banks. Despite its many troubles, including the recent fire that razed the bank's opulent Paris head office, Chmn. and Managing Dir. Jean Peyrelevade is confident that Credit Lyonnais can bounce back.

Banking Institutions, Depository Credit Intermediation, Venture Capital Companies, Miscellaneous Intermediation, Investors, not elsewhere classified, Management, Banks (Finance), France, Credit Lyonnais

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The fallen samurai?

Article Abstract:

Japanese banking is still mired in crisis. Although Bank of Tokyo-Mitsubishi and other large banks seem to be coming out the bad debt crisis that has ravaged Japan during the early 1990s, there are indications that the problems will not go away anytime soon. The Japanese banking sector is in a quagmire not because of individual managerial incompetence although this is still ingrained in the system. The problems are actually rooted in systemic weakness, with banks being over-regulated, under-capitalized and over-stretched. Therefore, although the worst asset quality crisis in Japan may be already dissipating, the features of the system that generated it remain entrenched. Banks and regulators are showing no sign of addressing them, thereby guaranteeing an unhealthy banking sector for an indefinite period.

Commercial Banks, Commercial Banking, Cover Story

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Banking on an uncertain future

Article Abstract:

The British banking industry may lose its competitive standing in the global market unless radical actions are taken. Cost-income ratios among banks remain relatively high, while total bank staffing has increased when it should have been controlled. The total number of British bank branches, the world's highest per head of population, has decreased by only 3% when it needs a 30% to 40% reduction in order to match the average of major competitors, other developed nations. To ensure the continued survival of the British banking industry, several measures need to be implemented, including a dramatic reduction in the size of branch networks, the dismantling and selective outsourcing of peripheral businesses, and increased attention on improving productivity and service quality.

United Kingdom, Methods, Bank management, Great Britain

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