Banking Banana Skins 2012: The System in Peril

This report describes the risks currently facing the global banking industry, as seen by a wide range of bankers, banking regulators and observers of the banking scene around the world. The survey was carried out in November and December 2011, and received 710 responses from individuals in 58 countries.The questionnaire asked respondents to describe their main concerns about the financial system over the next 2-3 years, score a list of potential risks, or Banana Skins, selected by a Centre for the Study of Financial Innovation/PwC panel and rate the preparedness of financial institutions to handle the risks they identified. Respondents felt that:

• Fragility of the world economy is the greatest threat facing the banking industry;
• Concerns about bank funding are on the rise;
• Back offices are under strain;
• Emerging market risks are among the few that are falling;
• Risks are global and similar across regions;
• US banks are better capitalized than European ones;
• Regulation, corporate governance and risk management remain risky issues;
• Outlook for interest rates is steady;
• Emerging markets look in better shape than developed markets.