Standchart advocates strong banking supervision
The Group Chief Executive Officer of Standard Chartered Bank, Mr Peter Sands, has advocated what he described as “strong regulations and strong supervision” to check the banking violations that have bedevilled the industry.
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He said it was observed that the global crisis that hit the banking industry the most was the result of the flaws in the regulatory regime and noted that, to prevent a future occurrence, there was the need for strong regulations accompanied by strong supervision.
Mr Sands made the call in an exclusive interview on the sidelines of the bank’s group board meeting held in Accra last week.
Mr Sands, who spoke on the global financial crisis that nearly sent most of the banks to their knees, said “I think some of the crises were because some of the rules were not good enough and some of the problems were because supervision was not strong enough”.
According to him, “If you have very good regulatory supervision, good supervisors can see the problems even if the rules do not catch the problems and my view is that we probably need to place importance on high quality supervision and less and less emphasis of lots and lots of new rules”.
“I think the good banks want strong regulation but they also want strong supervisors to be able to keep players in the industry on track”, Mr Sands said.
He said as banks, what is more important to run efficiently was more of liquidity and not necessarily the capital.
Mr Sands said Stanchart had been supportive of any kind of changes to help revive failed banks adding that “we have supported the implementation of the Basel III”.
“We have too much emphasis on more regulations rather than better regulation and also there is a degree of different countries wanting their own flavour of regulation which may end up with enormous complexities because we have a lot of different variance of roughly the same thing and that even increase cost”, he said.
SURVIVING THE CRISIS
On how stanchart was able to survive the global financial crisis, Mr Sands said “2012 was our 10th successive year of record income and profits.”
He said since the crises “we have doubled profitability because we were very disciplined and we were stuck to our strategy and our focus on our clients and our markets that we know was high”.
The Group Stanchart CEO also mentioned the strong balance sheet of the bank which also helped.
He said the bank also did well to ensure strict adherence to the basics of banking. “We are always obsessed with the basics of banking; managing our controls, managing our risks well, managing our liquidity and we never lost sight of the fact that we all have to get the basics right and get the basics rights on the clients and customers”.
“So there was not a silver bullet but being good at what we set out to do. The other aspect that helped us was the very cohesive and the very value driven culture we have coupled with the commitment to doing the right things”, he said.
Mr Sands said it was unfortunate that some banks before the crisis had lost sight of what banks were supposed to be doing and “we have been focused on our roles in supporting companies to trade, grow and invest; supporting individuals to meet their financial needs and I think those things sought to help us as we navigated through the crisis”.
Graphic Business/Ghana