Exclusive outtakes from industry leaders
John Walsh has spent many years in Washington — having worked at the Senate Banking Committee, the Treasury Department, and now as acting Comptroller of the Currency — and has a bit of perspective on government reaction to crises over the years.
So he has a fairly pragmatic philosophical approach on whether U.S. efforts will succeed in making sure the financial crisis does not recur.
“It is hubris to imagine that we can anticipate all the things that can go wrong and prevent them. That has never happened in human history, I don’t know why it would happen here,” Walsh said at the Reuters Future Face of Finance summit.
The Dodd-Frank set of Wall Street reforms includes components that are “on point to try to avoid such a thing happening again,” he said.
While wealthy clients remain ultra-cautious about real estate, some are being tempted to snap up trophy properties that promise to throw off a healthy amount of cash.
On the fringes of the Reuters Global Private Banking Summit, Banco Santander executives said they had been involved in six to eight large real estate transactions including the sale of a Miami marina in this year.
“Gold is not an investment. It doesn’t pay you interest and it doesn’t increase wealth,” complained one investment advisor recently as he perused exploding client demand for the yellow metal.
“It’s just a cautious asset for scared investors,” he grumbled as he waved a chart showing prices had once again hit an all-time high.
With the German government hot on the heels of untaxed wealth stashed in Swiss bank accounts, and the U.K. government taking a tougher stance on clawing back bonuses, rich folks will likely head for the hills – or the Alps to be more precise – senior private banking executives said in Geneva.
“People are going to arbitrage different tax jurisdictions. We are going to see European clients moving to Switzerland, very large families,” said Alberto Valenzuela, deputy chief executive of Societe Generale Private Banking (Suisse) SA.
How rich is rich? For most people, the answer is simple: ”not me.” But for private bankers keen to handle the assets of the well-heeled from Moscow to Malibu, that question is a slippery one. Sometimes a simple number won’t do, either.
Just about every executive at Reuters Global Private Banking summit in Geneva has a different standard for what those in the business call “ultra high net worth individuals”, the really rich that are the industry’s prime catch.
And he wants people to be clear that the problems are with Wall Street, not banks.
Thain, speaking at the Reuters Global Finance Summit in New York, said a deal to sell a partial stake in Merrill Lynch to Goldman Sachs would have been better for him, but the sale of the entire Wall Street firm to Bank of America was the best outcome for shareholders.
Those who tend to avoid posh restaurants in Geneva’s expensive Rue du Rhone district and famed private banks because they believe they are not rich enough may be given a second chance at century-old wealth manager Julius Baer.
The Swiss private bank, which has made its name thanks to the services it offers to the ultra-rich, believe its powerful high-end brand may be keeping potential clients away.
They have all been beneficiaries of European banks’ preference to tinker with company balance sheets rather than fundamentally restructure indebted businesses, one speaker said at this week’s restructuring summit.
“Every time we have a recession I sit down with the head of workout for bank clients and ask what banks are going to learn,” said Hood, who first qualified as an accountant in 1970.