The Risks of Covid-19

After a six-year absence, the Banking Banana Skins Report is back. Produced by the Centre for the Study of Financial Innovation (CSFI), Banking Banana Skins 2021 describes the risks facing the banking industry as seen by financial service practitioners and close observers of the banking scene, such as analysts, consultants, regulators and academics. The survey was carried out in November and December 2020 and is based on 155 responses from 11 countries.

According to the respondents, three of the top four risk concerns are Crime, Technology and Security (a newcomer), which can surely be related to the operational changes that have been forced on the industry as a result of the Pandemic, and the attendant security concerns. The other one of the top four, i.e. the Macroeconomic Environment, can also be attributed primarily to Covid complications.

Some of yesteryear’s leading risk contenders, i.e. Liquidity, Compliance and Capital Availability, appear to be causing significantly fewer sleepless nights currently, with rankings of 20, 21 and 22, respectively. Equally, Regulation (i.e. the risk of too much of the flipping stuff) has fallen close to the relegation zone (16), having been ranked first in 2014 and third in 2015, as regulators have taken their foot off the reform pedal, presumably to avoid adding to current Pandemic-related burdens.

Interestingly, and possibly of greatest concern, the Banana Skins Index of the Report points to an all-time high level of anxiety in the banking sector at present, since its introduction 20 years ago, higher even than in 2008.

It’s definitely worth checking out:  Banking Banana Skins 2021