The largest banks have been described as too big to FAIL for some time. And with limited personal and corporate consequences resulting from misbehaviour they have all been described as too big to JAIL. But is it is possible that they are too big to SAIL? Have the largest banks grown so large that they can no longer be managed effectively?
This concern is supported by two recent articles in the Financial Times. Last week there was an extensive article on the challenges facing banks, primarily European, in finding the next set of CEOs. This article implicitly suggests that there are very limited candidates to run the large banks.
And today was an article regarding the unhappiness of the UK regulators with Deutsche Bank’s ongoing failure to address a variety of compliance related issues. Deutsche Bank is not the only bank facing challenges on addressing compliance issues. Clearly large banks face a complexity issue in staying in line with regularity requirements in a variety of geographic locations in multiple business lines.
Whilst banks and CEOs see value in size and complexity, the challenge is whether banks can be effectively managed? Are there captains to sail these ships?
