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What is the main skillset a banker must possess to tackle this pandemic?

The banking gears must not slip, and that is why it is so essential to have an extensive risk management system in check always and continuously updating them. Banks are exposed to numerous risks on daily basis from their lending activities, in their participation in financial markets and from wider operational problems like suffering a cyber-attack or losing s senior executive or even worse, being hit by an earth quake! The current crisis has shown that there can be soft risks that even the top operational risk management systems also may not be fully functional. At the same time, bank which manage these soft skills not only protects its business but also boosts it.

Financial firms were not blindsided by the COVID-19 as the other businesses were. Pandemics are one among all the risks that the regulators ask the financial firms to consider and plan. The SARS (severe acute respiratory syndrome) and MERS (Middle East respiratory syndrome) outbreaks had already provided many countries, especially Asia, a taste of what the COVID strain was capable of doing. Lockdowns however exposed that after all some banks were not ready to face this massive inclusion.

Senior managers in banks have always valued soft skills. But as an adjunct to what was essentially always a very technical training, explained Olivier Beroud, the founder of Beroud Consulting and the head of the Centre for Risk at the London Institute of Banking & Finance. She said that the bankers were used to training that only dealt with the logical and ethical aspects of their work, but they had never had to deal explicitly with the role of feelings. For example, how to show vulnerability as a leader and how to communicate to staff that they share their concerns. But this pandemic put forth soft skills into a sharp focus for numerous reasons. Those included were, he challenges of managing employees working remotely; dealing with staff who were frightened or anxious about the pandemic and their jobs; touching the personal lives of people who were juggling work and children, perhaps in a confined environment, according to Beroud.

The London institute of Banking & Finance, teaming up with the Asian Banking School, lately ran a drill session on the risk for senior bankers in Malaysia and comprised a novel element of asking the participants to put together a reflective journal on what they had learned in the course. They didn’t expect reflective journals to be the star of the training program, said Dr. Paramsothy Vijayan (Vijay), director of Graduate Training and FSTEP at the Asian Banking School. It was mainly valuable because many senior financiers don’t have the opportunity to reflect on the particular aspect of management and get well-versed feedback. It turned out that the senior managers were in fact very eager to test out their skills that they rarely got to examine in depth. One CEO in Malaysia reflected that the basis of his success was his ability to show that he was comfortable being an ‘incomplete leader’ and that he was able to let go of the old-style role of ‘I know’ and rather ‘I can turn to people who know’, Beroud explained. And it turned out to be a valuable mindset. How to deal with other people feeling insecure is through honesty, said Katharine Pons, an executive coach and business director at The Thrive Program, who worked on the training session in Malaysia. One may not be able to provide security and being open about ‘I don’t know’ can be the best way. And one also has to be realistic. There is no point in promising it will all be over by Christmas, which just doesn’t work anymore.

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Goldman banker hired by the Citi bank

Citigroup has hired Luisa Leyenaar-Huntingford from Goldman Sachs. This new hire is to co-head its global infrastructure franchise. Because, it seeks to win more business from cash-rich investment firms focusing on infrastructure deals. Leyenaar-Huntingford will be based in London. Responsibility will be shared with Todd Guenther in New York.

The pair will work closely with industry teams covering healthcare, industrials, natural resources and clean energy transition (NRCET), technology and communications. Leyenaar-Huntingford helped in the establishment of the Goldman’s infrastructure franchise in her time at the Wall Street bank. They will team up with Citi’s Iberia co-head of banking, capital markets and advisory (BCMA) Jorge Ramos will continue to be a senior member of the global infrastructure franchise.

The infrastructure sector is poised for further growth, according to the memo. The memo was released by Citi’s global co-heads of the alternative assets group Anthony Diamandakis and John Eydenberg, and its EMEA head of BCMA Nacho Gutierrez-Orrantia. There was significant private investment demand across the globe to deal with environmental, energy, transportation, waste, communication, digital and other social needs.

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Banks make slow progress on UK gender pay

Major banks in Britain made a slight dent in their gender pay gaps. Several insurers went backwards. Companies in Britain with more than 250 employees have been required to publish the difference between the pay and bonuses of their male and female employees. They got a reprieve due to the pandemic, last year. The financial services sector has shown one of the largest genders pay gaps in Britain. The lack of women in senior jobs is the main reason.

Pay gap data from 21 major financial institutions showed a narrowing in their average mean gender pay gap. This is just 0.4 percentage points. Banks alone had a pay gap which narrowed by one percentage point. Ann Francke, chief executive of the Chartered Management Institute said that the UK’s financial services industry has often been singled out. It really does have to get its house in order. Goldman Sachs had the widest gender pay gap in the year to April 2020. Goldman posted a gender pay gap of 51.8%. The bank told the staffs that narrowing the gap further was a critical priority. A spokesperson for banking lobby group UK Finance said, that there is clearly more still to be done.

FTSE 100 insurers Prudential, Legal & General and M&G reported a widening in their pay gaps. Prudential’s UK gender pay gap widened to 45.2%. M&G also reported a widening in its pay gap in the most recent year to 30.5%. The M&G spokesperson said that they are determined to narrow their gender pay gap and will do this by achieving better representation of women in all roles at all levels of our organization. Legal & General’s mean gender pay gap widened to 30.8%.

The insurer said that the legal & general is tackling the underlying causes of its pay gap. This is by creating a more diverse workforce and a more inclusive culture through sustained, long-term action. Admiral had a gender pay gap last year of 12.8%. The 21 firms surveyed were Barclays, HSBC, Lloyds, NatWest, Standard Chartered, Bank of America Merrill Lynch, Goldman Sachs International, JPMorgan, Morgan Stanley, UBS, Credit Suisse, Deutsche Bank, PGMS (a Phoenix unit), abrdn, Schroder Investment Management, St James’s Place, Legal & General, Prudential, Admiral Group, Aviva and M&G.

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BOJ to lower inflation target-Japan’s finance minister

Japan’s outgoing finance minister, Taro Aso, said that he had proposed lowering the central bank’s 2% inflation target. This is when the prices took a hit from plunging oil prices. He was the finance minister for nearly nine years. The slump in oil price was among the main reasons the government could not officially declare an end to deflation. In his final news conference as finance minister, Aso said that he proposed to Governor Kuroda that, with oil prices falling this much, it would be hard to achieve 2% inflation. Hence, the target must be lowered at some point. He stated this by referring to Bank of Japan (BOJ) chief Haruhiko Kuroda.

Aso also said that the governor said he would do his best to achieve the target. This is stated by adding that policymakers must scrutinise at some point, why the BOJ’s inflation target of 2% has not been met. The remarks highlight how the government and lawmakers distanced themselves from the BOJ’s target years ago, despite central bank reassurances that achieving the target was possible by maintaining or increasing stimulus.

Aso was deeply involved in negotiations with the BOJ. After Kuroda took over as governor, he deployed a massive asset-buying program. This is for pulling Japan out of deflation. Aso supported the BOJ’s stimulus efforts. He is a member of the cabinet. And also, had raised many doubts that monetary policy alone can reflate the economy out of the doldrums. New Prime Minister Fumio Kishida is set to form a cabinet.

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