‘Banks must benefit from Asia’s emergence’
Indunil Hewage
The local banking industry needs to reap maximum possible benefits in
the face of Asia's emergence as a global economic giant whilst rapidly
expanding its footprints across the region, DFCC Bank Chief Executive
Officer Nihal Fonseka said at the CEO's forum organized by the Institute
of Charted Accounts of Sri Lanka yesterday.
The theme of the CEO's Forum was ‘Regulation, too big to fail and the
future of global financial services’. Speaking at the event ,Fonseka
said the entry of Sri Lankan banks into the global market is a highly
regulated business where we will have to follow and adopt certain
regulations.
It is no easy task to enter a another market , sometimes the size of
the industry becomes a major impediment for us to penetrate another
market. Being a small player, local banks would find it quite difficult
to expand its presence in the region rather than a big player.
Touching on the current state of the Sri Lankan banking industry,
Fonseka said ,we have mostly been catering to the local segment .With
peace and stability in the country, we see great prospects in the
economy and the financial segment of the country as a whole, however ,
the prosperity of Sri Lanka will depend on how we blend into the trends
in Asia .
In the face of Asia's emergence as a one of the vibrant economies in
the world ,Asian financial institutions including banks have adopted
different strategies to be on par with its counterparts in the EU and
USA. Banks in South Asia have diversified into retail banks and
investment banks during the past couple of years by increasing their
capital base, footprint while building business partnerships with global
giants in similar industry.
In addition, banks need to have quality and adequate assets to meet
the medium and long term requirements while improving the liquidity of
banks together with the stipulated principles. To reap the benefits from
the present context in the Asian finance market, banks will have to
increase its footprint in the region while revamping its risk management
practices and management sophistication,”Fonseka said.
Australia's Westpac Banking Corporation, Head of Risk Reward, Edmund
Bosworth also shared an Australian perspective on how the avalanche of
regulation is changing more than just the structure of bank balance
sheets , but the culture of the bank themselves. He also set out the
arguments for and against formalized state intervention in the financial
system and reviewed the alternative pathways that banks and regulators
in different geographies may choose to follow. |