One way to make a lot of money in banking is just to be really good at it. But this is not a very good way! There are lots of people who want to make a lot of money in banking, and all of them1 have at least considered the approach of “just be good at it,” so you have no real competitive edge if that’s your strategy. You need to be creative and think outside the box, as you might say, if you were not very good at banking, as the law of large numbers says you are not.
I love me some Credit Suisse; they think outside the box. Then they sell the box to themselves in a roundabout fashion that magically removes it from their balance sheet. So when I saw this
“As we continue to reduce costs, continue to optimize our capital and we continue to have momentum on the client side we think we will be able to improve our return on equity toward that 15 percent target,” Dougan said in an interview with Bloomberg Television. “That’s something that’s achievable.”
I had so much hope! I mean, “reduce costs” is boring and sad, and “momentum on the client side” is just like “be good bankers” which whatever, but “optimize our capital” could mean all sorts of devious things.
It probably does but I couldn’t find them. I mean, other than the usual devious things, which start with “Basel II.5 core tier 1 ratio increased by 2.2 percentage points to 14.7%, total capital ratio increased by 1.0 percentage point to 21.2″ and segue right along into this funding stack: Read more »
