This time last year, I was feeling awfully pessimistic that anyone "in charge" of our economy had a clue. It wasn't that I heard folly in their ideas—it was that having attended countless conferences and symposia pledging to confront the pressing (and depressing) financial issues of the day, it felt as though I wasn't hearing any ideas at all.
Instead, big names in finance and official-looking people in important government posts would show up at these events, commiserate about the state of the world and agree before lunchtime that we all must work together to find solutions. Well, duh.
I can't say what it was that I was expecting back then. Christine Lagarde criss-crossing the Atlantic in a red Superman cape, saving the day with a five-point plan to repair the global banking system? Paul Volcker pulling up in the Batmobile and punching out a band of shady mortgage brokers before keynoting a luncheon for the Economic Club of New York? I'm certain I was never that naive. But it was disappointing to find, over and over, that the well of ideas for fixing finance had seemingly run dry.
Is it just me, or has something changed in recent months? While I'm not sure we are meaningfully closer to solving our economic challenges—unless you believe in the idea that time heals all wounds, and there's something to be said for that—it does seem as though fresh thinking on fixing the financial system is finally making a long-awaited comeback, and it's coming from a variety of sources.
In Washington this fall, at just the sort of conference on global banking that otherwise might have contributed to my cynicism, Citigroup CEO Vikram Pandit put forth an interesting proposal aimed at injecting more transparency into the market. Have regulators create a benchmark portfolio, he suggested, and require financial institutions to come up with hypothetical loan-loss reserve levels, stress test results and risk-weighted assets against it. That way, investors would have a window into how each institution thinks about risk, with easily comparable statistics that can help the market determine whether a 10 percent Tier 1 ratio at one bank might be calculated as a ratio of, say, 8 percent by another.
I don't know how feasible or desirable Pandit's idea is. My guess would be not very, based on the post-speech chatter I heard from some of the regulators and academics in the audience. But it almost doesn't matter. The fact that a new idea had a) bubbled to the surface and b) been articulated by the head of a large bank that has exercised a fair amount of clout over the years was, to me anyway, a significant milestone.
I was similarly encouraged during a recent trip to Starbucks, where an energetic barrista had come out from behind the counter to sell $5 wristbands benefiting the Opportunity Finance Network. I wasn't familiar with the program, but I purchased a wristband anyway. It was partly out of guilt—could I say no to a $5 donation for a jobs program when I was about to drop a similar amount on a latte?—but mainly it was out of respect for the ingenuity it took to put together an initiative to help our economy. (For more, visit
We're kickstarting the new year with our annual ideas issue, reporting on the latest developments in banking and hopefully sharing the spirit of innovation that this fresh thinking implies. I hope it inspires and challenges you.
What are you changing this year in terms of technology, marketing, product sets or approaches to customers? Drop us a line and let us know. And have a very happy new year, from all of us at American Banker Magazine.
Heather Landy
Editor in Chief
