Future of Banking

Business Spectator - Banks on the brink

Banking everywhere is going to look very different in 2010. Already it’s clear that to varying degrees the industry will be government-controlled. That means old-fashioned ideas of just lending what you get in deposits will prevail, with wholesale funding as a minor supplement rather than the main game.

This is how banking could very soon look like. In the near term it could easily sink even lower than where it is at the moment. And then it will be quite hard to go up for the simple reason of completely different business model with lower profits and debts that will have to be repaid to governments.