By Till Guldimann, Vice Chairman, Sungard
The past 10 years have led us to a turning point for the financial industry; having come through the darkest night in recent history, we’re emerging into a new dawn. Three major drivers are reshaping the financial markets today:
In response to the crisis, regulators, investors, and managers have changed their view of how financial institutions need to be run and how the markets should be controlled; demanding more disclosure, improved risk management and more capital. It’s now clear that market infrastructures need to bring more resilience to the system. And, many previously well-respected institutions have been dissolved, restructured or merged into others, causing large amounts of talent to be released into the labor markets; many have found new employment in smaller ventures and start-ups.
Economic growth differentials between developed and emerging markets are widening. Consumers in developed markets have been shocked by loss of employment, security and savings. Their governments accumulated large deficits in bailout and economic stimulus programs – all to be recovered by future tax revenues. Economic growth is down.
Not so in the emerging markets: Consumers were hardly affected by the crisis, governments continue spending on infrastructure and exporters of raw materials enjoy higher commodity prices. The new economies are not only catching up, they can leapfrog old economies in selected industries because they are less burdened by legacy. The consequence is further globalization and growth in trade and financial flows.