PREVIEW-Bankers gather to assure industry is on right track

* Annual banking conference in Frankfurt, Sept. 8-9

* CEOs of Morgan Stanley, Unicredit, Commerzbank to speak

* Bundesbank President Weber to speak about regulation

* FinMin Schaeuble to speak about tie of state and banks

By Arno Schuetze

FRANKFURT, Sept 6 (BestGrowthStock) – Top executives from some of
the world’s leading banks are due to gather for a conference in
Frankfurt later this week as lenders seek to avoid what they see
as overly harsh regulation following the global financial

Existing rules failed to ensure that banks held enough
capital and liquidity to withstand the crisis, forcing
governments to bail out lenders with taxpayer money.

Regulators have been moving to put banks on a shorter leash
— a set of rules called “Basel III” — with decisions likely to
be made by November. [ID:nLDE67U1V4]

But banking executives argue that a regulatory crackdown on
banks could cut 3 percent off economic growth over the next five
years in the United States, euro zone and Japan and cost almost
10 million jobs. [ID:nLDE6591EZ]

Two years after Lehman Brothers’ collapse heralded the
global financial system’s breakdown, chief executives at Morgan
Stanley (MS.N: ), Unicredit (CRDI.MI: ) and Commerzbank (CBKG.DE: )
are expected to try and convince the audience at the “Banken im
Umbruch” conference that they have done their work to stabilise
their banks and should not be thrown back by new banking rules.

Banks’ results have improved vastly this year, as provisions
for bad loans dropped due to an improved global economy. But the
sustainability of profits is still in doubt amidst some fears of
a “double-dip” recession.

“We have reached a stall speed for the U.S. economy, where
growth’s going to be less than 1 pct. Even if it’s not
technically a double-dip recession, it’s going to feel like a
recession”, U.S. economist Nouriel Roubini — dubbed “Dr. Doom”
for correctly predicting the financial crisis — told Reuters
Insider TV.


This year’s conference, which comes ahead of a meeting of
the Basel Committee’s supervisory body on Sept. 12 to decide new
global financial rules, will see a number of high-profile
speakers take the podium again.

Morgan Stanley’s James Gorman, who took over as CEO at the
start of the year, will speak on Wednesday. The manager, who
first turned around the company’s retail brokerage, has made
progress putting the whole group back on track, as shown in
strong second-quarter results.

In 2009, rival Goldman Sachs boasted of record profits while
Morgan Stanley posted an $800 million loss — but still
increased its bonus payout pool by a third.

Also on Wednesday, UniCredit’s chief executive, Alessandro
Profumo, will look into “the future of European banking”.

Profumo, who took the helm at the Italian lender in 1998,
has created one of Europe’s biggest banks, emerging from a group
of savings banks through a flurry of acquisitions — like that
of German HypoVereinsbank five years ago.

On Thursday Commerzbank’s chief executive, Martin Blessing,
will outline his roadmap for recovery for Germany’s
second-biggest lender.

Commerzbank had to be bailed out in the financial crisis,
and although returning to the black this year it remains unclear
how it is to repay 18 billion euros in state money.

Defending the stance of regulators, German Finance Minister
Wolfgang Schaeuble and Deutsche Bundesbank president Axel Weber
will also speak at the conference.


This year’s motto of the conference is “On the way to ‘new
normal'”, but some part of the debate is expected to focus on
the “old” debate of bonus payments.

Wolfgang Gerke, president of thinktank the Bavarian
Financial Centre and the opening speaker at the conference, is
sceptical about whether the crisis has loosened the banking
industry’s attachment to a bonus-driven business culture.

“Goldman Sachs (GS.N: ) is now where it was before the
crisis,” Gerke said. “Investment bankers don’t seem to have
learned a lesson.”

“That’s why it is especially important that Basel III makes
banks take precautions for new crises and we do not see losses
being socialised while profits are privatised,” he said.

The EU in July decided the world’s toughest curbs on bank
bonuses, which will come into force in Jan. 2011.

But the debate on high payouts flared up again last week
after Credit Suisse (CSGN.VX: ) said managing directors would get
a special September bonus. [ID:nLDE67U0R5]

Bank lobby group the Institute of International Finance
(IIF) admitted that banks still needed to be more open about the
size of their bonus pools and the methodology for paying star
bankers. [ID:nLDE6811TQ]

Josef Ackermann, chief executive of Deutsche Bank (DBKGn.DE: )
and chairman of the IFF will not attend the conference.

But in words of welcome published in the conference
programme, he said: “Banks cannot operate in a parallel world,
they need the acceptance of society.”
(Reporting by Arno Schuetze; Editing by Greg Mahlich)

PREVIEW-Bankers gather to assure industry is on right track