Bank-wide Level
The financial crisis harshly shows that the business models and earnings targets of many banks have to undergo a fundamental health check. In particular, financial institutions with a strong capital market focus and weak retail business are hit hard by the crisis due to materialising risks, the declining value of assets and the resulting tightened liquidity. In order to find crisis-proof, sustainable business models, strategic stocktaking and repositioning is necessary in many cases.
Moreover, numerous institutions also lack equity due to a loss or massive reduction in the value of their assets. The risk-bearing capacity is also threatened in many banks. The consequence: The reduction of risk positions (deleveraging) is given priority and equity measures need to be taken. Efficient capital management that takes account of supervisory and economic impacts is a must.
Rethinking is also required in the field of control and incentive systems. Previously, incentive systems frequently focused only on short-term profit maximisation. Sustainability, sound risk-bearing capacity and long-term orientation are indispensible. Therefore, control systems at least have to be adapted or, if necessary, even developed anew from scratch.