US Banker's "'Shadow' Boxing"
US Banker writes "'Shadow' Boxing". The piece says, "As the economy brightens and capital issues resolve, one question is whether banks will now step out of the shadow of the so-called shadow banking system. In separate investor presentations this month, the chief executives of two banking powers based in the southeast offered competing views on the issue. Generally defined as the constellation of securitization vehicles, broker-dealers, money market mutual funds and the like that competes with traditional depositories, the shadow system cut banks' share of lending in half over the final 25 years of the 20th century. BB&T Corp. CEO Kelly King predicted that the reversal of disintermediation." US Banker quotes, "We're now getting ready to go through a couple of decades where" the banking industry will "get most of that market share back." The article adds, though, "Capital One Financial Corp. CEO Richard Fairbank argued, however, that while deposit funding is essential, traditional banks ... lack a proportional capacity to produce assets." Fairbank comments, "What happened to the assets? The assets were taken off the shelf of banks over the last 20 years by national players like Capital One and so on in many of the consumer businesses.... I don't see any prospect any time soon for that going in the other direction."
