IMOVE BLOG
  • iMove Chicago
  • Real Estate School
  • Laws
    • CRLTO >
      • 5-12-010 Title, Purpose And Scope.
      • 5-12-020 Exclusions.
      • 5-12-030 Definitions.
      • 5-12-040 Tenant Responsibilities.
      • 5-12-050 Landlord’s Right Of Access.
      • 5-12-060 Remedies For Improper Denial Of Access.
      • 5-12-070 Landlord’s Responsibility To Maintain.
      • 5-12-080 Security Deposits.
      • 5-12-081 Interest Rate On Security Deposits.
      • 5-12-082 Interest Rate Notification.
      • 5-12-090 Identification Of Owner And Agents.
      • 5-12-095 Tenants’ Notification of Foreclosure Action.
      • 5-12-100 Notice Of Conditions Affecting Habitability.
      • 5-12-110 Tenant Remedies.
      • 5-12-120 Subleases.
      • 5-12-130 Landlord Remedies.
      • 5-12-140 Rental Agreement.
      • 5-12-150 Prohibition On Retaliatory Conduct By Landlord.
      • 5-12-160 Prohibition On Interruption Of Tenant Occupancy By Landlord.
      • 5-12-170 Summary Of Ordinance Attached To Rental Agreement.
      • 5-12-180 Attorney’s Fees.
      • 5-12-190 Rights And Remedies Under Other Laws.
      • 5-12-200 Severability.
    • Illinois Eviction Law (Forcible Entry And Detainer)
    • Illinois Security Deposit Return Act
  • Today's Cool Thing
  • Social Media
    • Facebook
    • Twitter
    • Pinterest
    • Instagram
    • Flipboard
    • Linkedin
    • Tumblr
    • Mix

Digitization helped spur spectacular banking failures

3/29/2023

0 Comments

 
Picture
​Clearly, these are not the same as your grandfather's bank runs.

​There’s a pivotal scene in the holiday classic film “It’s a Wonderful Life” when panicked depositors at the Bedford Falls Building & Loan swarm en masse to withdraw their funds. Protagonist George Bailey averts a bank run by explaining fundamentals: “You're thinking of this place all wrong, as if I had the money back in a safe. The money's not here. Your money's in Joe's house, right next to yours, and in the Kennedy house, and Mrs. Macklin's house, and a hundred others.”

That was then. As the recent rash of bank closures have shown – including the collapse of Silvergate Capital Inc. and Silicon Valley Bank, both of California, followed by that of New York City-based Signature Bank – failures are immediate, with an acceleration largely fueled by digitization. It’s clear that no elegant, Great Depression-era soliloquy appealing to a sense of community would have helped avert a bank run in the real world today.

How digitization is changing finance

In a recent telephone interview with Mortgage Professional America, Emmanuel Daniel detailed differences from the past that allow for bank failures to occur at stunning speed and shock-and-awe spectacle. His new book, “The Great Transition: The Personalization of Finance is Here,” has garnered rave reviews for its prescient insights on the personalization of finance and its attendant perils.

“What has changed – and is changing – the nature of banking of the US and globally is driven by several new factors,” Daniel said. “The first factor is because of the digitization of finance, a bank run is instantaneous, immediate and ruthless. In the old days, a bank run used to be thousands of people queuing up in front of the bank, and the bank still closing on time at 5 p.m.,” he said.

Even after the bank closed, it would be days before the dust settled to assess the level of deposits left intact, he added. “Today every customer can just go online and demand to have their deposits withdrawn. Technology itself is a dimension that affects how banks respond and the options that are open to them.”

How do banks measure liquidity?

Then there’s the matter of liquidity that adds to the sheer spectacle of collapse: “The amount of liquidity the central bank has passed into the system and then the COVID recovery program and so on resulted in an incredible accumulation of deposits in the banking system,” Daniel said. “In the past, when a bank had access to an incredible volume of deposits, it actually worked well for the banks. In the US system, there is a history of banks having redeployed the assets they receive into high-yielding assets,” he said, pointing to Treasury bonds and mortgage-backed securities as examples.

Ironically, the recently failed banks had been largely following the same tactics, Daniel added: “In one sense, what the banks had been doing is no different than what they have always been doing.”

But the old template – the “balance sheet of traditional banks,” – may no longer apply, Daniel suggested: “Having access to cheap sources of deposit was an incredibly powerful proposition for banks,” he said. “It meant there were many things they could do with cheap sources of funding. But now the balance sheet is starting to change, and it has called into question some of the regulations that have been put in place after the 2008 crisis.”

The upshot: “Regulators will now need to look back to the balance sheet of a bank and say, ‘What do we allow banks to do going forward?’ And I think that’s going to be a long, long haul because the nature of the securities that the banking industry invests in has new risks that didn’t exist before.”
​
A global entrepreneur, Daniel is the founder of platforms such as The Asian Banker and Wealth and Society, through which he has had extensive contact with leaders in banking and finance around the world. Given the banking turmoil that has recently unfolded, the insights from his book are suffused with a measure of prescience. He suggested as much himself: “I actually predicted that the next crisis which is underway at the moment will be predicated not by any underlying asset on the balance sheet of a bank but on the perception of its ability to meet its obligation.”

The breadth of insight presented in his book has drawn praise from business and political leaders:
  • “Emmanuel Daniel’s “The Great Transition” is extensively researched, an encyclopedia of the past, the present and possible future of the financial services industry,” Dick Kovacevich, retired chairman and CEO of Wells Fargo, wrote. “Based on his decades of experience as a worldwide consultant, especially in Asia, he describes how the financial industry’s drudgingly slow and glacial transition to the future will accelerate at warp speed in the digitized world of tomorrow. He describes what is going to happen, why it will occur, how it will proceed, and what you have to do to be successful. Digitizing existing products is not the answer, he says. The products must change, be personalized, and be device agnostic.”

  • “There are two types of books currently on the market today—those that predict the demise of banks due to changing technologies, and those that predict the demise of cash resulting from the development of digital currencies,” Ron Shevlin, chief research officer, Cornerstone Advisors and senior contributor for Forbes, wrote. “The Great Transition: The Personalization of Finance is Here” creates a new category. Like other books, there is a discussion of technologies like cryptocurrency, APIs, and blockchain. But unlike other books — which often just proclaim the technologies’ ascendency and predict they will ‘change the world,’ — The Great Transition goes behind the scenes to define the anatomy of innovation and why technology will lead to a fundamental reimagining of financial products and cause today’s institutions to crumble.”
​
  • “This is a tough book in the very best sense of that word,” former US Congressman Barney Frank wrote. “Readers should be prepared to pay serious attention to complex issues of fundamental social and economic importance. Unlike many whose familiarity with a particular status quo induces a sense of comfort in their thinking about the subject, Emmanuel Daniel builds on his lifelong study of the financial system not to just confront the hardest questions that have been raised about it since the crisis of 2008, but to formulate newer and more profound ones.”


0 Comments

Your comment will be posted after it is approved.


Leave a Reply.


    iMove Chicago

    iMove Chicago is a full service real estate brokerage.  We are comprised of a team of brokers, leasing agents, dedicated support staff and professionals focused exclusively on delivering the results you demand, deserve, and expect. We bring knowledge, dedication and customer service to all we do. We provide you the information you need with accurate, updated listings that are available if posted. You can rely on iMove's professional, experienced team to help you make informed purchase, rental or sale decisions. At iMove Chicago, we believe that results matter and knowledge delivers.  iMove's team is "bringing Chicago home..."  Together, let's get moving!


    Our Offices

    4422 N Ravenswood Avenue
    Chicago, Illinois 60640


    Ph.  773.856.6200
    Fx.   773.856.6201


    Rusty Payton, EzineArticles Basic Author

    iMove

    Categories

    All
    1601 W Chase Unit 2e
    #1 Im Chicago Real Estate
    2012 Interest Rate
    2800 Lake Shore Drive Apartment For Rent
    $31 Million Apartment
    5415 N. Sheridan Chicago
    Agents
    Agent Safety
    Andersonville
    Andersonville Apartments
    Andersonville Condo Purchase
    Andersonville Farmer's Market
    Andersonville Midsommerfest 2012. Chicago Apartments
    Andersonville Real Estate
    Andersonville Shops
    Andersonville Summer Festival
    Andersonville Wine Walk
    Ann Sather Edgewater
    Apartment Demand Slows
    Apartment Rentals In Andersonville
    Apartments For Rent
    Apartments In Andersonville
    Apartments In Edgewater
    Appeal Chicago Real Estate Taxes
    Art In Andersonville
    Asia On Argyle
    At Properties
    Avondale
    Bark In The Park
    B&B Chicago
    Bed And Breakfast Chicago
    Belly Card Chicago
    Bike Chicago 2012
    Bloomingdales
    Bongo Room
    Breakfast In Edgewater
    Bucky Gear
    Burner App
    Business Card Design
    Buy Owner Closes
    Carbon Monoxide Detectors In Chicago
    Certified Fund To Close
    Chase Bank
    Chicago
    Chicago Apartment
    Chicago Apartments
    Chicago Apartments And Satellite Dish Ordinance
    Chicago Apartments For Rent
    Chicago Apartment Vacancy Rates
    Chicago Bed Bug Ordinance
    Chicago Bed Bugs
    Chicago Building Data
    Chicago City Sticker 2012
    Chicago Farmer's Markets
    Chicago Fire At Park Tower
    Chicago Floor Plans
    Chicago Foreclosure
    Chicago Gangs
    Chicago Lakefront
    Chicago Lease Form
    Chicago Library Edgewater
    Chicago Loan Modification
    Chicago Lofts
    Chicago Neighborhoods
    Chicago Parking Meters
    Chicago Parking Spaces
    Chicago Police District Map
    Chicago Property Tax Assessment Appeal
    Chicago Property Taxes 2015
    Chicago Real Estate Agents
    Chicago Retail Stores
    Chicago Service Dogs And Renting
    Chicago Street Sweeping Schedule
    Chicago Summer Festival Guide
    Chicago Swimming Pools
    Chipotle
    Chris Feurer
    City Sticker
    Coldwell Banker
    Comunity Alert
    Condominium Assessment Post Foreclosure
    Credit Card Surchaege
    Credit Report
    Credit Reports
    Crlto
    Cta
    Dalai Lama
    Debtor's Prison
    Dogs
    Edgewater
    Edgewater Community Council
    Edgewater Gay
    Edgewater Library
    Edgewater Lofts
    Elmwood Park Single Family Home
    Eminent Domain And Mortgage Seizure
    Erickson Ocasio Imove Chicago
    Esgewater
    Fico Score
    Foreclosure
    Foreclosure Information For Renters
    Great Dane
    Halloween In Chicago
    Hamilton's Bar & Grill
    Hamp
    Haunted House
    High Rise Fires
    Homes For Under $200 Month
    Homestead Exemption
    Hot Dogs. Huey's Andersonville
    Hotel Chateau Chicago
    Hotels Skokie Evanston B&B
    Housing Recovery
    I-go Cars
    Illinois Community Association Manager Licensing
    Illinois Loan Modification
    Imove Chicago
    Imove Chicago Agents
    Interest Rate On Security Deposits
    Interviewing Agents
    Jameson
    Jameson Real Estate
    Jameson Sotheby
    Joe Berrios
    Jumbo Mortgage Rates
    Keller Williams
    La Fitness Edgewater
    Lakeview Chicago Apartments For Rent
    Landlords
    Lease Break
    Leasing Agents
    Liability Insurance
    Lincoln Park
    Lincoln Park Chicago Apartments For Rent
    Lincoln Park Single Family Home For Rent
    Loan Modification
    Loan Modification Scam
    Loft Chicago
    Loft Living
    Lofts
    Lofts For Rent
    Logan Square
    Loop And Downtown Chicago Apartments For Rent
    Loyla
    Loyola Student Housing
    Machael Sato
    Michael Sato
    Mobile Do Not Call List
    Mortgage Fraud
    Movies Inthe Park 2012
    National Bank
    News
    Old Town Chicago Lofts For Rent
    Online Marketing Chicago Real Estate
    Panera
    Parade Route
    Parking
    Parking In Andersonville
    Parks
    Phone Apps
    Planter Heads Mag Mil
    Property Of The Week
    Property Tax Bills 2012
    Property Taxes
    Property Taxes Too High
    Prudential Rubloff
    Ranjha V Bjbp
    Real Estate
    Real Estate Sales In Chicago
    Real Estate School
    Real Estate School Chicago
    Real Estate Taxes
    Realtor Prortraits
    Recycling
    Rental Market In Chicago
    Renter
    Renter's Insurance
    Renters Right To Install Satellite Dish
    Rent Increases
    Renting
    Rent Vs. Own
    River North Chicago Apartments For Rent
    River West Chicago Apartments For Rent
    Rogers Park
    Rogers Park Apartments
    Rogers Park Chicago Apartments For Rent
    Rogers Park Map
    Rogers Park Neighborhood Of The Year
    Roost Chicago
    Sales
    Sales Tips
    Section 9(g)(4) Illinois Property Condominium Act
    Security Deposits
    Selecting An Agent
    Sheridan Road Apartments
    Shoplifting
    Shopping Mag Mile Places To Stay
    Single Family Homes For Rent In Evanston
    Single Family Homes For Rent In Lakeview
    Single Family Homes For Sale In Edgewater
    Single Family Homes In Andersonville For Sale
    Sliders
    Social Media And You
    Solutions To The Parking Meter Mess
    South Loop Chicago Apartments For Rent
    Square And Imove
    Staging
    Starbucks
    Starbucks Edgewater Shipping Containers
    Strreeterville Chicago Apartments For Rent
    "three Dog Night"
    Trader Joe's Andersonville Edgewater
    Trulia
    Twitter For Business In Chicago
    Uptown
    Urban Living
    Vacancy Rates In Chicago
    Virgin Mobile Andersonville
    White Castle Food Truck
    Wicker Park
    Wilson Red Line Uptown
    Working With A Rental Agent
    Yelp
    Zebras

    Archives

    December 2023
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    April 2015
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    November 2011
    May 2011
    March 2011
    February 2011
    September 2010
    August 2010
    July 2010
    April 2010
    March 2010
    December 2009
    September 2009
    August 2009
    July 2009
    June 2009
    May 2009
    March 2009

Powered by Create your own unique website with customizable templates.
  • iMove Chicago
  • Real Estate School
  • Laws
    • CRLTO >
      • 5-12-010 Title, Purpose And Scope.
      • 5-12-020 Exclusions.
      • 5-12-030 Definitions.
      • 5-12-040 Tenant Responsibilities.
      • 5-12-050 Landlord’s Right Of Access.
      • 5-12-060 Remedies For Improper Denial Of Access.
      • 5-12-070 Landlord’s Responsibility To Maintain.
      • 5-12-080 Security Deposits.
      • 5-12-081 Interest Rate On Security Deposits.
      • 5-12-082 Interest Rate Notification.
      • 5-12-090 Identification Of Owner And Agents.
      • 5-12-095 Tenants’ Notification of Foreclosure Action.
      • 5-12-100 Notice Of Conditions Affecting Habitability.
      • 5-12-110 Tenant Remedies.
      • 5-12-120 Subleases.
      • 5-12-130 Landlord Remedies.
      • 5-12-140 Rental Agreement.
      • 5-12-150 Prohibition On Retaliatory Conduct By Landlord.
      • 5-12-160 Prohibition On Interruption Of Tenant Occupancy By Landlord.
      • 5-12-170 Summary Of Ordinance Attached To Rental Agreement.
      • 5-12-180 Attorney’s Fees.
      • 5-12-190 Rights And Remedies Under Other Laws.
      • 5-12-200 Severability.
    • Illinois Eviction Law (Forcible Entry And Detainer)
    • Illinois Security Deposit Return Act
  • Today's Cool Thing
  • Social Media
    • Facebook
    • Twitter
    • Pinterest
    • Instagram
    • Flipboard
    • Linkedin
    • Tumblr
    • Mix