The beatings will continue until morale improves
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The beatings will continue until morale improves

Every time it looks like the post-crisis reshaping of the financial system is over, banks seem to realise there’s much more still left to do.

Deutsche Bank chief executive John Cryan’s announcement of a big goodwill writedown, a dividend cut, more litigation charges, and a year to date loss of €4.8bn was prudent new boss strategy. Get everything possible out in the open, while it can still be blamed on your predecessor. Start afresh, and lower expectations.

But it’s a measure of just how dismal expectations already were that the stock was off less than 2%. Deutsche ‘fessing up was actually a relief, because it took a rights issue off the table. The bank might have done three capital increases since the crisis, but nobody felt a fourth was out of the question.

Also on the naughty step on Thursday was Credit Suisse, reported to be asking for at least Sfr5bn ($5.17bn) of new capital when it completes its strategy review – three years after a Sfr8.7bn capital increase.

The pair have underperformed their peers, but an inability to truly draw a line under the problems of the past plagues the whole industry.

Part of it is, to be fair, thanks to regulatory change. It’s not so much a question of moving the goalposts, rather, it involves building different goalposts on a different pitch for a different sport.

After two Basel Accords in 20 years, we’ve now had two and a half in seven years, while whole new areas have been drawn into the regulatory perimeter.

But plenty of this is the fault of the banks themselves. Few of the banks have articulated a convincing vision of the future of wholesale finance, and fewer still have acted on their vision.

Deutsche didn’t even manage to stop lying about benchmark manipulation after banks started getting caught manipulating benchmarks.

With Deutsche, Credit Suisse, Standard Chartered all announcing strategic plans, and cuts being made across the banking sector, it looks like a miserable end to the year for investment banks.

An optimist would hope that 2016 would therefore be a chance for new starts and clean slates. But it’s getting increasingly hard to keep the glass half full.

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