On 24 January 2025, the ILF hosted its 13th Conference on the Future of the Financial Sector on the topic of “Bank Disintermediation - Causes and Consequences”, co-chaired by Andreas Dombret and Patrick Kenadjian, in conjunction with our Knowledge Partner Oliver Wyman and with the support of Amazon Web Services and the European Banking Federation as well as our Media Partner, Bloomberg.
The day long conference addressed the world wide phenomenon of the diminishing share of the financial sector assets and activities being provided by traditional deposit taking banks, which is of particular importance to the European Union, given Europe’s disproportionately large reliance on the banking sector for financing the real economy in comparison to other economies, in particular the United States, at a time where demographic, climatic, technological and geopolitical change all contribute to increasing the need for private sector financing.
The program included a keynote address by 2024 Nobel Prize Winner in Economic Science, Professor Simon Johnson of MIT and a discussion on whether the European Union’s long deferred Capital Markets Union project might prove a game changer for the banking sector between Lord Jonathan Hill who, as EU Commissioner, initially proposed the CMU project ten years ago and Lorenzo Bini Smaghi, the current Chairman of the Board of Société Générale. There were separate panels which examined the factors most often cited as contributing to bank disintermediation, including competition from non-bank financial institutions, the effect of post-global financial crisis banking regulation, the possibility that retail central bank digital currencies might contribute to further bank disintermediation, as well as a panel which covered ongoing research into the possible consequences of bank disintermediation on the effectiveness of the transmission of central bank monetary policy. The conference delivered valuable and sometime surprising insights into each of these areas.