Author: World Finance

Philippe Wallez on private banking | ING Belgium | Video

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ING Belgium was formed when Banque de Bruxells and Banque Lambert, both founded in the 1800s, merged in 1972. Philippe Wallez, CEO of Private Banking at ING Belgium, talks about ING’s success in the country, the latest trends in private banking and wealth management, and its dedicated service for family business owners.

World Finance: Tell us why you think ING has been so successful in Belgium?

Philippe Wallez: It’s mainly due to one key element, which is the fact that we are the number three private bank in Belgium, but we are integrated within a universal direct bank: ING Belgium. So, we can take full opportunity of all synergies to offer to our clients a fully fledged financial service offer.

And especially we have the synergy with the retail banking, where we can detect opportunities to provide the best advice for our clients. The fact also that the 250 bankers in my team are spread over the territory: they are in the regions. So your banker is never far from you, they are always close to you.

Also we have a synergy with the small and medium sized enterprise department, where we can have a common approach towards owners of companies and top executives, in order to really give global wealth advice for private and company purpose.

These are the main reasons, and of course the last reasons are the fact that within ING Belgium we can offer all types of product. Cash solutions, not only investment solutions; lending and credit solutions, not only investment solutions. So we can offer all type of solutions.

“In private banking, we see a strong development of digital, online services”

World Finance: And it’s a competitive market; how are you different from the other private banks?

Philippe Wallez: The most important part is probably our approach towards companies, called the family business approach, where we detect that there is a special need for owners of family-owned companies towards the business cycle of their company, to have special advice in wealth.

We also have, through this approach, a specific partnership with the successor. So, for when you need to give your company, or to sell your company, we call that the Successor Academy, where we have a special training programme for the successors. So that’s one key aspect.

A second, totally different aspect, is the fact that we have been the founder of the Art Society. And the Art Society, simply said, is a network for wealthy people, passionate about contemporary art.

And I would add a third element, which is quite important as well, is the fact that we recognised that within private banking, wealthy people also have special needs towards financing for real estate. And we developed a special mortgage centre, dedicated for private banking, where actually we can give advice for mortgage by phone, which is unique in Belgium for private banking, and highly successful. These are, for example, three aspects where we are different.

World Finance: Now, you offer specific advice to family business owners; tell us more about this.

Philippe Wallez: Yeah, you have to know that 70 percent of companies in Belgium are family-owned, representing about half of the riches produced in Belgium. So the family network of business is extremely important in Belgium.

So, we recognised that, and what we decided to do is, hand in hand with the mid-corporates departments, look to all the needs of the owners, from the start of the company until the end. And from a private banking perspective.

So we offer wealth management advice, for personal, private wealth, as well as for company wealth. And another element which is quite important for the owners of these family-owned companies is that we are also the exclusive partner of the family business network, which is a platform network for successful family business companies, so they can meet each other, exchange ideas, exchange information, exchange advice; this is really the way we are working with them.

“70 percent of companies in Belgium are family-owned, representing about half of the riches”

World Finance: If we turn to the wealth management sector in Belgium in general, what are the trends we’re seeing at the moment?

Philippe Wallez: There is one key trend that we observed in Belgium, but also in other markets. This is the move from cash to investment. So, there is a move to investment, there is a renewed interest of clients to invest in equities. Of course, we have to respect risk profile of clients, and it’s a question of good asset allocation. There is a need for reallocate assets.

Another trend which is probably particular to Belgium, is what we call the wealth repatriation. So, there are more and more clients willing to repatriate their wealth in Belgium. This is of course stimulated by government rules.

Another aspect which is probably also more particular in Belgium is the fact that real estate stays very attractive as investment. And the last one is perhaps more surprising, but we clearly see clients willing to invest in what we call real assets. Real assets being, for example, arts, cars, houses… it can even be land. The price of land has been increasing due to that move to real investment in real assets.

World Finance: So finally, tell us about your future vision, and the planned developments at ING.

Philippe Wallez: Oh, there are many projects and plans in the pipe, but I would certainly stress one very important one within the strategy of ING Belgium. We want to be the best direct bank, and also in private banking, we see a strong development of digital, online services. So, we already have a very an app for daily banking, and we are developing an app for private banking, specially focused on reporting.

But we clearly see more investment in the future, because of the need for clients to do for themselves, whatever they want. Online, through smartphones and tablets. So, we are heavily investing in this direction.

World Finance: Philippe, thank you.

Philippe Wallez: Thank you.

Dr Mohammed Haider Ali Miah on banking | EXIM Bank

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EXIM Bank – the Export-Import Bank of Bangladesh – was created in 1999 with the aim of contributing to the country’s social and economic development. Dr Mohammed Haider Ali Miah, Managing Director and CEO of EXIM Bank, talks about the bank’s transition from a conventional commercial bank into a fully-fledged Islamic bank in 2004, and how EXIM Bank gives back to the Bangladeshi community through its many CSR projects.

World Finance: Tell us about EXIM Bank’s operation – the services you offer and the clients you work with.

Dr Mohammed Haider Ali Miah: EXIM Bank is one of the best third generation banks in our country. EXIM Bank is a customer-friendly bank, and EXIM Bank is a religious-friendly bank, and also a CSR-friendly bank. We are mostly an export-import service oriented bank. We are offering a good number of services to the people of the country, such as online banking services, credit card and debit card facilities, and ATM service. Electronic clearing house also we are offering, with a remittance service, swift service and locker service. And also we have our Hajj service.

“EXIM Bank is a customer-friendly, religious-friendly, and CSR-friendly bank”

World Finance: And your services are being well received, with a 35 percent growth in profits last year; tell us about your position in the Bangladeshi market.

Dr Mohammed Haider Ali Miah: We achieved a 35 percent growth in operating profit last year, because our bank’s total investment – that is $1,650bn, our total investment – out of this, 46 percent we are investing in government industry. From here we earn a handsome amount of profit.

Another point, our non-performing loan is less than two percent. So, we have the greater opportunity to earn more profit. In our country, out of 47 banks, we are the highest profit earner bank.

World Finance: EXIM Bank used to be a conventional commercial bank, but you transformed your operation into an Islamic bank in 2004. What impact has this transition had on your returns, the products you offer, and the relationship you have with your customers?

Dr Mohammed Haider Ali Miah: EXIM Bank has 57 deposit products and 21 investment products. Out of these, the products that are very important, one is the Mudarabbah cash deposit account. And then the medicine deposit account for medicine purpsoes.

Another account is the senior citizen account, for citizens aged 55 years and above. He or she is entitled to open this type of account and with this account we are offering highest weightage and highest profit, for their living standards.

And another one is the Hajj deposit account, for performing holy Hajj. So, these are the most important products out of 57.

“We achieved a 35 percent growth in operating profit last year”

World Finance: Finally, you touched earlier on your CSR activities, tell us more about these projects, and how you make the business case for giving back to the community.

Dr Mohammed Haider Ali Miah: EXIM Bank is a CSR-friendly bank. EXIM Bank has already formed different projects for CSR purposes. We have a scholarship programme, for scholarship purposes from school level to university level. Another is our donation project: we have charity or donation projects, in our country that is, for example, educating and nursing autistic children. Another project is the hospital, EXIM Bank Hospital. All class of peoples can use the services of this hospital, with a minimum service charge. These are the major projects of our EXIM Bank CSR activities.

World Finance: Dr Haider, thank you.

Dr Mohammed Haider Ali Miah: You’re welcome. Thank you very much and thanks to all.

Andrew Bascand and Christian Hawkesby on New Zealand | Harbour Asset Management | Video

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With Europe is still in the throes of the debt crisis, we don’t hear much good news about the economy. However, New Zealand has recorded solid growth for the last few years. Andrew and Christian explain how emerging technology sectors are supporting New Zealand’s traditional export industries, discuss the central bank’s influence on the country’s stability, and outline how this story is affecting the New Zealand equity market.

World Finance: Andrew, let’s begin with the big picture for the New Zealand economy.

Andrew Bascand: Well, the truth of it is the New Zealand economy is in good shape. And the foundations of that shape really started almost three decades ago, when we had our own financial crisis. We nearly defaulted on our debt.

So, we then spent the best part of a decade putting in place the structures and productivity improvements that we needed to, and since then  the economy has been more productive, more flexible, and it’s opened its arms to the Asian economy. We’re four and a half million people: we’re maybe not that important to the world economy, but the world economy’s important to us, and the economy’s going well.

World Finance: You say you’re not important to the world economy, but you do have very important export sectors. What are the sectors driving economic growth in New Zealand?

Andrew Bascand: You know, that’s very true. Clearly New Zealand exports renewable resources to the world: water and sunshine. Obviously, we create protein, and we’re exporting protein to the world. But, people maybe think too much of just those sectors.

The truth of it is, we have a vibrant technology sector. A lot of bright Kiwis have been around the world, they’ve come home, and they’ve started globally relevant companies that are doing really well.

The final thing about our growth at the moment is that we’re rebuilding our second-largest city. Christchurch was devastated in 2011. Tragic. $40bn will be spent over the next five to 10 years rebuilding that city. It’s started today. And guess what? That money is coming from global insurance companies.

It’s very relevant: $40bn is 25 percent of our economy. So, we’ve sort of underwritten our growth, through being attached to Asia, and having this rebuilding story.

World Finance: You both began your careers with the New Zealand central bank, so, Christian: what has that done to improve the economy’s stability?

Christian Hawkesby: New Zealand has really been a pioneer in providing the central bank an inflation target and the independence to achieve that. That happened back in the late 80s, among a number of other macro-economic reforms which have really provided a stable macroeconomic backdrop over the last 20 years now.

Added to that, the reserve bank has been very focused recently on ensuring that banks are well capitalised and have good liquidity positions, and that’s really helped the New Zealand banking system weather the global crisis in a much better shape than North America and Western Europe.

World Finance: Andrew mentioned the connection you have with Asia, especially China. Tell us more about that relationship.

Christian Hawkesby: Absolutely. It’s really benefited New Zealand hugely, being on the doorstep of Asia and the structural changes that are going on there. For places like Australia that’s meant demand for steel and iron ore; in the case of New Zealand as Andrew mentioned it’s more about protein, dairy products and tourism. So, we’ve benefitted greatly.

New Zealand’s been very focused on negotiating free trade agreements, and they’ve really been ahead of the curve. That’s been great, because it’s really unlocked and enabled us to tap into that very fast-growing part of the world.

World Finance: Back to you Andrew, how is this big picture impacting New Zealand equities?

Andrew Bascand: Business confidence in New Zealand is strong. So is consumer confidence. And it’s been that way for some time. What that means is, businesses have invested, and that investment is coming through in terms of company profits, and increasing dividends. So our equity market yields about five percent. That’s pretty good on the global stage. In addition, we’ve got these great new listings in the agricultural sector, companies like Fonterra, Synlait Milk – can access this protein story – and new technology companies coming to the market as well. And they’re performing strongly.

So, we’ve got this diversified ability to offer investors yield on the one hand, and growth on the other. And, while I know markets will be volatile, over the medium-term I feel quite secure in saying New Zealand’s got some good foundations for growth going forward.

World Finance: And what about the bond market? Christian?

Christian Hawkesby: Well, for the New Zealand bond market, there are two key themes really. One is that it’s been a good environment for credit. There’ve been no major credit events in New Zealand, and we’ve really got a corporate sector with very strong balance sheets, and that provides confidence for investing in credit.

Secondly, like everywhere else in the world, interest rates have been cut in New Zealand by the central bank, but not by nearly as much in New Zealand, so we still remain a relatively high-yielding country by global standards.

World Finance: Christian, Andrew, thank you both very much.

Andrew Bascand, Christian Hawkesby: Thank you.

The International Bar Association invites you to Boston

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The ramifications and effects of the global financial crisis continue to expand, acting as catalysts of further instability. The International Bar Association’s Annual Conference in Boston, 6-11 October 2013, is a unique platform to assess how legal and regulatory reform can provide remedies to the world’s problems. Michael Greene explains how IBA conference speakers have been suggesting solutions since the start of the crisis, and invites World Finance members to attend the 2013 conference in Boston.

Michael Greene: The International Bar Association is the global voice of the legal profession, and it is the world’s leading organisation of lawyers, bar associations, and law societies.

The ramifications and effects of the global financial crisis continue to expand and act as catalysts of further instability, particularly in the financial markets. In October of this year, the gathering of more than 5,000 legal practitioners, business leaders, and regulators, at the IBA’s annual conference in Boston, provides a unique platform to assess how legal and regulatory reform can provide remedies to these dynamic issues.

In Buenos Aires in October 2008, opening speaker, economist Hernando de Soto, addressed the then very current issue of the property bubble.

“It’s not that we lack money, it’s that we don’t know how many banks are owning pieces of claims and property”

Hernando de Soto: What is seen essentially as a great credit contraction, as essentially a liquidity and risk-pricing issue, which is what the sub-prime crisis is labelled as, is also essentially a legal problem. People left the body of property law as it has been practised in the world over the last 100 years – because that’s when property really came to exist – and they went to an area of law called securitisation: the kind of toxic paper that we see floating around the market.

And that is the cause of the distrust in the banks. Because it’s not that we lack money, it’s that we don’t know how many banks are owning pieces of claims and property in the US market. You don’t know! And that’s why nobody wants to give each other credit, because we don’t know who owns what.

Behind every crisis there is, it’s security over property that breaks. It is when legal documents cease to represent the truth, when my passport ceases to represent me, that we get into problems. Because we’re six billion people in the world, and there’s no way that we can know each other except through law.

Michael Greene: In October 2012, Nobel Laureate and economist Joseph Stiglitz assessed the state of the world economy, and to what extent the instruments brought to bear since October 2008 had the desired results.

“Austerity has almost never worked. Herbert Hoover tried it, he succeeded in converting the stock market crash into the Great Depression.”

Prof. Joseph Stiglitz: Well, it’s five years since the beginning of the recession. Six years since the breaking of the bubble. The downturn, the slump, continues, with no recovery really imminent. In many countries – many of the countries of Europe particularly – GDP is still less than it was before the crisis.

I think the problem is, the diagnosis in Europe of what went wrong, was wrong. And as a result, the prescription was wrong.

Because they misdiagnosed the problem as overspending, the prescription has been, quite naturally, to cut back on spending: austerity. But one should remember: austerity has almost never worked. This is an idea that’s been tried over and over again. Back in 1929, Herbert Hoover tried it. He succeeded in converting the stock market crash into the Great Depression.

The IMF has tried this experiment in East Asia. I saw it in the years that I was at the World Bank. They tried it in Latin America. Each time it succeeded in converting downturns into recessions, recessions into depressions.

Michael Greene: Also last year, Nobel Peace Prize winner and micro-finance pioneer Muhammad Yunus touched on similar themes to Stiglitz. Many of the core issues affecting the global economy – and in turn, national economies – are so far-reaching because they are inherent issues within the institutions attempting to resolve the crisis. Yunus went on to suggest that a completely different paradigm is possible, exists, and can be replicated.

“The law that creates a bank for the rich is a different kind of animal. It’s for the rich. You need a different kind of legal framework to create a bank for the poor.”

Muhammad Yunus: The whole system that we call the capitalist system is based on the fact that business’s job is to make money. And everywhere people are busy making money, because that’s what is defined as the mission of all people, all businesses. In some cases it’s an addiction, and that’s why the financial crisis came, because of an addiction.

We have been talking about creating social businesses. A social business is a special kind of business, which we’re trying to promote, that are mission-driven businesses, not personal, profit-driven businesses. The company makes profit, but the profit stays with the company to achieve the goal that it was set up for. So these are non-dividend companies to achieve social goals, to solve human problems.

We created a lot of them in Bangladesh, many other countries around the world are very interested and started social businesses in Europe, Japan, the US, Brazil, Mexico, and so on. But first of all you have to admit that there is a vacuum of the institutions and policies. This is a barren land for that.

So this is why you have to do something, to bring the institutions to work for the poor people, to get them out of the situation they’re in. And also to create new legal structures. Because you think, “Okay, the bank is there, why can’t you create a bank to do that?” But the law that creates the bank, which is a bank for the rich… it’s a different kind of animal you create with that law. It’s a bank for the rich. So you need a different kind of legal framework to create a bank for the poor.

Michael Greene: This year’s annual conference of the International Bar Association starts on Sunday 6th October in the Hynes Convention Centre in Boston. The conference lasts for five days, during which we’ll hold over 180 sessions. Among the keynote speakers will be Paul Volcker, former Chair of the US Federal Reserve, and Madeleine Albright, former Secretary of State for the US. We look forward to seeing you in Boston.

Alexey Oschepkov on social trading | Nettrader | Video

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Has social trading had its day, or do financial service companies continue to underestimate the potential in this area? Alexey Oschepkov, Senior Vice President of Nettrader, discusses its Tradernet 2.0 offering, the way that social media creates a whole new dimension in forex trading, and the challenges of helping traders to learn and understand the best ways to leverage the social element.

World Finance: First, tell us about Tradernet. How was it created, and what does it offer?

Alexey Oschepkov: Tradernet is a modern hybrid social network and stock broker. We’ve put two dimensions together. One line is the brokerage, another line is the social network. When you combine those two lines, you get the whole new plane, where you can compete more freely, and you can offer a lot more services.

“You should not consider two ingredients as a simple cocktail. When we add the social dimension, we really change the game”

World Finance: So this social network dimension, how much does it add to the experience of the everyday trader?

Alexey Oschepkov: It is not really accurate to say it adds, one thing does not really add to the other. You should not consider two ingredients as a simple cocktail. When we add the social dimension, we really change the game, as with, let’s say, steam engines. Mechanically they’re the same as diesel engines, but adding chemistry – those little explosions – produces a whole new set of industries. Same thing here.

As for the interface, the interface is a language in the true sense of the word, like English or algebra.

World Finance: How do you teach people to speak and to understand that language?

Alexey Oschepkov: Scenarios, as in video games. Video games are obviously the top innovators in the broader sense of the computer or communication industry. See, everything has to match with the attitude of today’s user, which sounds something like, “I will never spend more than 10 seconds trying to get to the bottom of anything!” So we have 10 seconds, and that’s it. And that simplicity mustn’t be harmful for the core of the service.

Scenarios might be ugly. For instance, when they redo the whole interface of MS Word, I don’t see what I benefit from it. But when they add a G+ button in the upper right corner, and don’t touch the interface that I’m used to, that’s another thing.

“Information comes to you from your network neighbour, from someone you can trust, someone who is similar to you. That really raises the value of the information”

World Finance: You pitch Nettrader as the serious social network. We already have dozens of social networks: Facebook, Twitter, Google Plus; whatever people are using them for, can’t traders get the same information from them that they would get from you?

Alexey Oschepkov: Probably yes, but that information would be coming to them through the inferior language. A pidgin language. If you want to publish an article with a mathematical analysis theory or something, you would use English, with Greek letters for variables, not anything else. We use that as an advantage to position ourselves, both among the social networks and brokers.

For the brokers side, we hint that, “Hey, we’re not an old, deceptive broker” – no one trusts Wall Street these days. On the social side, we say that, okay, it’s a serious thing you deal with – assets – and we try to dispel your financial illusions that we try to help you to get rid of replacement of means of exchange, means of earning. You should not keep fiat currency and any derivatives such as bank deposits as your assets. Those are not your assets. Stocks are the only asset, actually. Something real.

And that information comes to you from your network neighbour, from someone you can trust, someone who is similar to you. Not from an analyst on the TV screen, you know? So, that really raises the value of the information that people can get from the network. That’s important.

World Finance: What is the potential for these sort of social networks? You say people aren’t trusting Wall Street any more, do you see social networks like this expanding even further?

Alexey Oschepkov: There are two trends as I see it. First is decentralisation of everything. You know, 20 years ago there were only two beneficiaries for all the telephone calls in the US. Everything is being decentralised. Currencies, energy supply, telecommunications, so, social networks will be forced to offer some APIs to allow users to freely exchange from one to another. So that’s one trend.

Second is that the average size of investment is getting lower and lower, and you have to be able to deal with that. We take off from the facade of the company, lots of traditional things, and those savings are being shared with our customers, obviously.

World Finance: You spoke about the potential for social networks in general, what is the future for Tradernet specifically? What are you planning to improve?

Alexey Oschepkov: We’ll stick to our scenario. We are adding markets and trading floors and currencies on a daily basis, almost. But we will try to develop the branching-off of scenarios in a way that replicates user expectation.

World Finance: Alexey, thank you very much.

Alexey Oschepkov: Thank you.

Andreas Kretschmer on pensions | AEVWL | Video

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As life expectancy continues to rise across the world, securing a stable pension scheme has never been more important than in today’s frequently changing financial markets. Germany’s Ärzteversorgung Westfalen-Lippe is a compulsory scheme for the country’s doctors, one of around 90 funds for the ‘liberal professions.’ CEO Andreas Kretschmer discusses its key investment areas, the long term benefits of an anti-cyclical strategy, and how the pensions sector is taking care to profit from changes to the financial system.

Views from FELABAN 2012: Kely Melo, Bloomberg

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Kely Melo tells World Finance how the transparency Bloomberg brings to markets is helping investors in Brazil and across Latin America, and talks about the outlook for the region in 2013.

Many of our clients are banking institutions, financial institutions, and we have them here in Peru as a client and all over the world, and this is also to understand their plans also for 2013, their plans here in Peru, and how we can work together.

The challenge is economic, obviously, and how we can continue to grow as a country, as an economy, and for the bank side, how we are going to avoid the impact of the crisis we have around the world.

Our presence in Brazil is growing, much faster than before, and I think that the transparency that Bloomberg provides for the market is something that’s been very well accepted. And being reliable: in news, in financial services, so we are trying to fit to Brazil needs, and also here in Peru, to their needs for systems technology.

The outlook is sort of positive in my point of view, in comparison to what’s happening around the world. It’s a challenge to understand how we’re going to perform, having China and other countries not importing from Brazil, which is a big exporter country. So, I think it won’t be as bad as it was this year, but still we’re going to face big challenges.

Views from FELABAN 2012: Oscar Rivera, FELABAN

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FELABAN is the largest conference of senior Latin American bankers outside the IMF meetings, and this year marks the 46th annual assembly. World Finance speaks to Oscar Rivera, who resigned as President of FELABAN at this year’s assembly. He discusses the organisation’s mission in furthering financial inclusion, the impact that Basel III and other north hemisphere -focused regulations will have on Latin America, and the goals of the Federation in the future.

World Finance: Financial inclusion is one of your key objectives at FELABAN; what’s the best way to develop these eMoney and financial education programmes on the continent?

Oscar Rivera: At FELABAN, we are indeed concerned about this matter: financial inclusion, and training our people up – i.e. financial education. This is because people on our continent are largely unaware of what is offered by the financial segment and the security that there is.

Therefore, this would mean that consumers would be much better informed about the products they could take advantage of. Basically, small and medium enterprises are sometimes unaware of all the financial products available which would make their lives much easier and make their transactions much simpler.

For example, with suppliers of products to supermarkets, payments are made within 90 days; factoring offered by BAN of the financial system would take the burden off their budgets, and they would have more liquid investments, rather than having to deal with the hindrance caused by 90 day payments. This goes on around the world: delayed payments being made by supermarkets.

“I do not think there is excessive regulation; I think that was the Fed’s big mistake: believing there was”

What do you think the lasting impact of Basel III will be on the continent?

Oscar Rivera: The impact on the continent – on the southern part of the continent – is a more robust economy, liquidity and strength. This is thanks to the economic policies that have been implemented in recent years by governments, which have maintained an interest in managing monetary policy, export policy and regulation in general.

This is precisely where regulation failed during the 2008 crisis in the US and now Europe: the regulators failed to fulfil their obligations.

World Finance: Is there a danger of excessive regulation leading to a reduction in lending?

Oscar Rivera: No, I do not think there is excessive regulation; I think that was the Fed’s big mistake: believing there was. There was too much deregulation, then it collapses. Instead of deregulation, it ended up becoming total liberalism.

Was there regulation? Yes, in the commercial banking sector there was, but not in the financial sector. The same is happening in Europe: there is lack of regulation to such an extend that at this point the EU said: “Let’s get rid of regulators and just share one single regulator.” I think it’s a slap on the wrist to European regulators, telling them, “You did not fulfil your purpose.”

We do have our concerns, however. Thanks to Basel, there may be over-regulation based on the problems of the northern hemisphere, which are totally unrelated to the problems of the southern hemisphere. Let me explain: the northern hemisphere is required by Basel to meet certain minimum capital requirements in 2019. These minimum capital requirements were fully achieved and exceeded in Latin America two years ago.

So, it’s clear that you cannot regulate… It’s just like within a family. You treat a badly-behaved son differently from a well-behaved son. The former needs more discipline; the latter can be given more freedom. The same goes for the economy, doesn’t it? They shouldn’t be treated the same.

“Basel III is based on the problems of the northern hemisphere, which are totally unrelated to the problems of the southern hemisphere”

World Finance: Now, commodities exports from Latin America have soared while domestic production has slowed. Is there a need to diversify?

Oscar Rivera: As regards domestic production, I think that what has been very useful during this period was that when the European and American markets in general shut down, there was a great response from the local markets. It is these local markets that have maintained the emergence of Latin American economies.

On the one hand, the socio-economic level has increased; the middle class has expanded compared with eight to 10 years ago. But in turn, trade has increased between the countries, which had not happened for years.

This idea can be personified by a football star. Latin American players are very skilful! Basically, I think that entrepreneurs from small and micro enterprises on our continent have worked hard so that they can adapt to different products, and they have achieved a much more substantial development.

World Finance: Finally, what does FELABAN want to achieve in the next five years?

Indeed, FELABAN aims to tackle the issue of financial education and to achieve greater financial inclusion. On average, in Latin America, there is financial inclusion among 50 percent of our population. But for countries such as Peru – my home country – only 30 percent of the population has contact with the financial segment. Therefore, this means making many people creditworthy who are currently not eligible for credit.

And a link that is being observed at the moment in South America is transactions carried out via mobile phones. There are more mobile phones than inhabitants: in a country of 30 million people, there are 35 million mobile phones. This is an important step, but it must be controlled by the Superintendency of Banking [the Peruvian regulator], and in turn, via a merger with the financial institutions.

I must reiterate that I’m not referring just to banks, but to financial institutions in general. Why? Because if this is not regulated, we will be faced with another major issue: money laundering. And if there is no regulation of money laundering… well, we have had bitter experiences of this in Latin America.

World Finance: Oscar Rivera, thank you.

Oscar Rivera: Thank you. We’re very glad to have you in Peru and at FELABAN. Thank you very much.

Views from FELABAN 2012: Martin Litwak, Litwak and Partners

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World Finance talks to Martin Litwak about networking opportunities at FELABAN, the challenges for Uruguay and the region in general as crisis-hit countries recover, and how Latin America must improve the rule of law to give security to investors.

FELABAN is one of the largest finance conferences in this part of the world, so, you know, every banker, every law firm active in the banking industry is here. So, we come to see our clients, to see colleagues, to try to expand our business, to learn something, maybe? So it’s an interesting event.

We have seen growth over the last, you know, five or six years, but that was mostly because of the international situation: the crisis in Europe, before that the crisis in the US, more than because Uruguay has done the right things to grow. so I guess the biggest challenge now is, okay, the world will recover sometime, it’s a fact it will happen – every crisis ends. And we have to see not only in Uruguay but in Latin America in general how those countries are prepared to compete when Europe and the United States are back in the game.

2013 will be a good year for most of the countries. I think Latin America has always been weak in terms of providing rule of law to investors; I think that’s the biggest issue in Latin America, and that’s the reason why some people that find an interesting opportunity, decide not to invest, because they don’t know what’s going to happen if they need to leave the country, they don’t know what’s going to happen if the government nationalises those investments. I mean, that won’t happen in Uruguay, which is rather conservative and traditional country. But still. It’s difficult to find regulations incentivising foreign investment.

Dr Victor Marroquin on Peru | Marroquin & Merino | Video

Posted on by World Finance

As the date of its presidential run-off election nears, Peru is a nation in waiting. Recently it has enjoyed incredible economic growth, with the World Bank forecasting continued strong development. But the political right is warning that the popular centre-left candidate could undo the reforms making the country friendly to investors. Dr Victor Marroquin explains his view.