Garsten also argued that new changes in the financial markets in terms of required upgrades to mainframe IT systems were causing problems for the industry.
“A lot of them are working on huge IT upgrades, these can take four years to implement by which time they are legacy systems.
“Another problem for the banks is that it is a commodities industry”, he argued. “Everything is online, and as such these banks only provide commodity returns”.
That several European banks are still looking for financing is also cause for concern, he said: “Deutsche Bank and Credit Suisse have recently asked for more money.”
He added: “People argue that the worst is behind them, I’m not sure.”
AB CIO Tawhid Ali was more moderate than the other two speakers. He argued that there was a downside with European banks because many were oligopolistic, but that the management teams had been largely reformed and they were now being run like utilities. “This reduces risk in the sector,” he said.
