Helping Banks Help Consumers
I was struck by how someone recently described the new chairman of the Federal Reserve Bank of the Unites States. Janet Yellen, she said, is not only the first woman to hold that post. But she's also the first Keynesian who's *open* about being one.
Being a Keynesian, of course, means that you have great faith in the power of monetary policy to affect the economy as well as the banking sector. That there have been central bank governors who have believed in Keynes is without argument. It's fascinating, though, that she is the first one in her country not to hide her devotion to this philosophy. I bring this up because monetary policy is back in the news again. Our colleagues who attended the World Economic Forum last month came away with a healthy dose of discussion on the topic.
As we concentrate on improving banking around the globe, it helps to think about this renewed interest in how policy affects consumers. For years, conventional wisdom was that banks themselves - by virtue of their sheer existence and day-to-day activities - created an environment in which every player in the market had an opportunity to succeed.
There's nothing quite like a global economic crisis to get people to dust off the works of Keynes, though. As we create new, simpler, and more convenient ways to perform consumer banking activities, it pays to recall that at least one half (and perhaps a lot more) of academics prescribe to the notion that countries must exercise some sort of guidance over the financial markets in order to create more stability. Enormous economies like India, the United States, and Germany have performed well five years after the crisis because their central banks took charge and instituted reform-minded environments.
As a result, we're seeing that consumers are increasingly coming to have faith in the large banks again. When they do, they're likely to borrow money in order to form small businesses and create jobs. Our own chairman has recently spearheaded a TV series in which he showcases some of the finest small businesses and entrepreneurs that fuel the growth of an economy. Now that many of the big nations are winding down their quantitative easing programs, it's more important than ever for the individual consumer to be confident and unencumbered in the way they go about using banks.
That's why it's so exciting to be part of the financial services innovation journey. The relationship between banks and their consumers has never been more important to the future of the global economy. They have great opportunities to introduce new and exciting ways to improve banking relationships. When commercial banks know their customers better -- and, indeed, they're becoming as savvy as retailers --they can fuel economic growth in tandem with their country's respective central banks. Keynes, I imagine, would be proud.