• The Primary Markets Powerhouse, hich uses secialist caabilities and renoned talent to advise on or structure highly rofitable issuances and deals • The Risk Master, hich relies on effective controls, oerful infrastructure and management confidence to take on and manage risk These are not rescritive business models, rather an articulation of hat constitutes high erformance in the different discilines of investment banking €s such they are designed to frame a strategic lanning exercise The first stage for a bank is to revie its ortfolio of business lines Žising caital constraints and sluggish groth rates are hamering the ability to generate sufficient returns on caital, meaning a bank must reork and re‘ustify the economics It is ossible for a bank to be successful in one, of the businesses lines in hich it oerates It or a combination, of models Hoever, it is crucial must then rationalise its ortfolio to focus on to areciate that each model is fundamentally only those in hich they ill feasibly be able to different and must be treated indeendently hile comete and that are relevant to its core business many of the features, such as investment in talent, strategies ’nderstanding ho current business are ubi uitous, the focus for investment varies in lines fit to these models ill hel in analysing the each one, meaning that the caabilities are rarely trade offs in the decision making rocess Further, transferable If a bank ishes to adot more than and crucially, it must ut the needs of its clients one model it must understand ho its uni ue at the centre of this exercise strengths can rovide linkages, but also ensure that it is able to back each chosen model ith sufficient Secondly, a bank must focus on building a investment to build a inning roosition cometitive advantage in each of its chosen models Each model outlines the key features €s investment banks fight to remain relevant re uired to be successful, highlighting the necessary in the turbulent marketlace, no is the time management choices, and resulting conse uences for strategic action Banks must abandon the of these To develo a inning roosition, banks recrisis mindset of trying to be all things to all must diligently focus on effectively stringing these eole and instead reevaluate their ositioning, features together and building marketleading to ensure lasting relevance to their clients and caabilities to underin each one a viable roosition to their shareholders ‰ “‹ontrol rights ”and rongs•”, Seech given by €ndre Haldane, Executive —irector, Financial Stability and ˜ember of the Financial Policy ‹ommittee, at the incott €nnual ˜emorial ™ecture, ”estminster, ™ondon•, š› †ctober š…‰‰
Focus for Success | Executive Summary Page 2 Page 4