Banking Banana Skins 2014

Every two years, PwC sponsors the Banking Banana Skins survey conducted by the Centre of the Study of Financial Innovation. Each survey identifies potential sources of risks to banks and then ranks them by severity. Also included are industry members' views about the risks they face, the soundness of financial markets, and other pressing issues.

PwC has joined forces with the Centre for the Study of Financial Innovation (CSFI) to explore what risks bankers worldwide are facing in the current climate and how they prioritise them.

This report describes the risk outlook for the banking industry at the turn of the year 2014 – a time when the global economy and its banking system were recovering from the financial crisis. This could be described as the first post-crisis Banking Banana Skins survey since it shows, for the first time in seven years, a decline in the level of anxiety about the condition of the banking system. The risk landscape it paints therefore reflects people’s risk preoccupations in a newly evolving world.

The findings are based on responses from more than 650 bankers, regulators and close observers of the banking scene in 59 countries.

In the opinion of these respondents, the greatest threat to the banking industry lies in the strongregulatory and political backlash that has taken place against banks in reaction to the crisis. These risks were ranked No. 1 and No. 2 respectively out of a field of 28 risks in the survey. The overwhelming message in the responses is that the weight of new regulation is becoming excessive, and could well damage banks and hold up the economic recovery. This view was held both by bankers and non-bankers, and was particularly strong in Europe and North America.