"The financial crisis has
put to the forefront the long-debated issue of banks’ capital adequacy, showing
that banks were much more fragile than they (and their regulators) pretended,
also because they were allowed to push their leverage to levels much higher
than any industrial company, or even a hedge fund, has never dreamt of."
"This column aims to
discuss this issue, looking at a sample of 20 global banks, analysed by
R&S, a Mediobanca subsidiary. The main conclusion is that banks have not
reached a new equilibrium after the financial crisis and that, if banks really
want to be more robust in the future, they must implement radical strategic
changes, aiming at deleveraging through reduction of non-core assets and/or
achieving substantial reduction of operating costs."
