A note by the Director Chateau Le Montebello 2013/08
September 20-22 2013
The beautiful surroundings of Montebello, advertised as the world’s biggest log cabin, were the setting for a vigorous debate on the financial industry. A group of practitioners, regulators, experts and a few fascinated outsiders were the grateful guests of Canadian Ditchley. We examined whether the sector had fully recovered from the 2007/8 crisis, what remained to be done to make it more resilient for the future, and how trust and confidence could be restored. The Canadian Finance Minister’s wise chairmanship kept us on the right track. We could have done with more emerging economy voices, but we still had a wide range of views on display.
There was a degree of confidence not only that the worst of the financial crisis of 2008 was over, but also that the policy measures put in place to boost capital and liquidity in the banks, and prevent excessive leverage, had done a great deal to increase resilience. However implementation was still a significant problem. Moreover, it was not possible to talk of a proper recovery until the severe damage done by the crisis to growth and fiscal deficits had been undone, and the financial system itself was genuinely able to promote growth through productive lending to individuals and companies. The global economy was now unhealthily addicted to the tsunami of money from Quantitative Easing (QE).
On the regulatory front, despite the progress, there was still confusion about definitions and criteria for buffers such as capital and liquidity ratios, and significant differences between jurisdictions. This was illustrative of the biggest single issue, which was the still largely national nature of regulation for financial institutions which were increasingly global in their structure and operations. National sovereignty was once more a major driver, now that the immediate urgency for coordination was behind us. Uneven implementation was also increasing fragmentation.
This also affected the major problem of resolution for big and failing international banks, where the answers still seemed some way off. We discussed the need for more structural reform of such banks, to break them up or ring-fence retail banking from the rest. Most of the practitioners round the table did not think this was necessary or wise – the market and diversification should do the job of protecting depositors. But a significant minority view held that just patching up the existing system did not go far enough.
How could trust and confidence in the banks be restored? We saw no easy or quick solutions, after what had happened. Better communication by the banks, particularly to their customers, could no doubt help, but deeds and sound, ethical banking practice would count for more. Excessive remuneration and lack of apparent accountability for the mistakes of the crisis were important elements in current unpopularity. Again there were no simple solutions, and the weight of opinion round our table was against legislating remuneration levels.
How good were we likely to be at predicting and avoiding the next crisis? The aim should not be to take all risk out of the system. Further crises were inevitable at some stage. The question was how quickly we would spot what was happening, how quickly corrective action would be taken, and how resilient the system would prove. There were grounds for thinking we were better equipped than before, but absolutely no room for complacency.
Despite our cautious optimism in some areas, we saw a number of continuing major problems:
the increasing complexity of the system;
competing national and international regulation;
unwinding QE safely;
managing the huge global pool of funds looking for yield;
and the short-term money-making culture.
We were therefore not confident we would not be taken by surprise again by financial developments. For the time being the biggest single fear was of the consequences of inevitable interest rate rises for asset price bubbles and over-leveraged institutions and individuals.
Is the crisis over?
We started by looking at how far we had come. We were reminded at the outset that the answer to whether we had yet fixed the problems which had led to the near meltdown of 2008 depended on what you judged the most important causes to be. For example, was it dodgy financial products, global imbalances, excessive leverage, a flawed banking model, or just plain greed? If your analysis favoured the first or the third of these as the dominant cause, you could be reasonably optimistic that we were well on the way to dealing with the issues. If it was one of the others, you could be forgiven for continuing concern.
The point was that the massive regulatory and reform effort undertaken since 2008 had put in place a lot of the building blocks necessary to correct the main technical issues. The riskiest products had been driven out of the market (though securitisation was making a gradual comeback – would it be sounder this time?), and the new capital and liquidity requirements had rendered impossible the kind of leverage ratios common before the crisis. These measures had not made another crisis impossible, by any means, but did mean that the sector was much better-placed to deal with it if and when it happened.
On the worrying side, global imbalances had changed in nature, but not improved. Indeed in some ways they were worse now than before. Some banks regarded at the time of the crisis as too big to manage or fail were also now even bigger, as a result of market consolidation. And it was not clear that the culture of excessive risk-trading for excessive rewards had really changed in some institutions. So some underlying major issues had certainly not yet been tackled.
Whether or not we were now better-placed to avoid or deal with a future crisis, had we at least recovered from the last one? Here the answer seemed to be generally positive. The financial markets were once again functioning, and the sense of immediate crisis had receded, even in the eurozone. Confidence between institutions had been largely restored, balance sheets strengthened, and overall resilience increased.
However, this degree of optimism rested on a narrow definition of recovery. We were still some way from restoring a stable and reliable financial system which could foster growth. The crisis had been hugely costly in terms of lost growth and fiscal deterioration for most of the developed world. Most of the major developed economies were still a long way below their size before the crisis, and growth rates remained sluggish at best. Productive lending, for example to fuel investment and help SMEs, was still inadequate in many markets. Fiscal consolidation and deleveraging still had a long way to go in most places. We could not therefore be said to have recovered in any meaningful economic sense. Moreover it was still unclear what would happen when the flood of cheap central bank funding was finally cut off.
Concern about this last point was a recurring theme in our discussions. The “tsunami” of money represented by QE was still in full flood, particularly following the recent Japanese change of policy. No one really knew what effect this had had and was still having on the real economy – for example whether the seeds of future inflation were being sown – or what the effect would be when the taps were finally closed, as they would surely have to be before long. The dramatic impact of the Fed’s recent “taper talk”, not least in the emerging economies, suggested something deeply unhealthy in the system. The addiction to easy money was worrying, and there had to be asset price bubbles in the system as a result. Stimulatory monetary policy had bought time for structural reforms, but was not a substitute for them, and might even delay them if we were not careful.
Regulation and Supervision
We spent quite a lot of time examining what had been done. Most of the experts thought that the regulatory steps taken since the crisis had been helpful in addressing previous weaknesses in the system. The capital and liquidity requirements now being imposed should help stop excessive leverage and increase resilience. However the bankers among us pointed out that there were significant issues about how these requirements were defined, which potentially weakened their effect. It was not entirely clear which buffers were supposed to be most important, and the rules were too complicated. There was a risk of putting too many eggs in the capital ratio basket. There were real questions about how government debt should be classified – and probably too much sovereign debt around in banks’ portfolios, particularly in Europe. Above all, rules varied significantly between different jurisdictions, for example about how assets should be defined to qualify as capital. It was not always clear, therefore, what was being demanded of banks. And it was not always clear that what was being demanded would have the effect sought.
This was one aspect of a much bigger problem, which was the mismatch between the international financial institutions being regulated, and the national bodies regulating them. There was no easy way round this, given national mandates, and the lack of will to move to genuinely international regulation and supervision. Co-ordination was the obvious answer, but this would always have its limits.
In the early days of the crisis, when we were facing systemic meltdown, the G20 had operated effectively as a centre of co-ordination. Everyone had seen the absolute need to work together and do the same things simultaneously. But as the crisis had receded, discipline based on survival had weakened, and national differences had re-emerged. In a multi-polar world, no one country had the size and dominance to set rules and standards which others would have to follow. The system was being increasingly balkanised, and it was not clear that the G20 or the Financial Stability Board had the will or the clout to re-impose discipline.
One particular problem in all this was resolution for failing financial institutions – global in life, but national in death, as had been famously remarked. It was not always clear which country would be prepared to act as the lead, or whether other countries where the institution concerned had important operations would necessarily follow that lead. There was a lot of work going on in this area but we were still some way from effective and agreed solutions. We heard for example that there was a serious struggle for power going on between international and national regulators and standard setters, with the latter very keen to preserve their powers and privileges.
We also discussed how far the regulators themselves were fit for purpose. Did they have enough experienced staff, for example, and were they able to find the right balance between getting inside the skins of the institutions they were trying to regulate on the one hand, and being captured by them on the other. We were not sure the answers to these questions were always yes. Meanwhile the gap in resources between lightly staffed regulators and huge banks with their batteries of lawyers and constant recruitment from the regulators, remained huge, and was indeed still growing.
A broader question was whether the regulators were busy refighting the last war, rather than focusing on the next one. This was a minority view in our gathering, but there were concerns that the regulators might be unduly restricting useful commercial activity without really tackling some of the underlying problems. A one-size-fits-all approach was tempting but could not work.
The value of stress tests was also looked at. The general view was that they were a good thing – perhaps the best innovation to emerge from the crisis. But whether they were helpful depended on their detailed structure – the garbage in, garbage out principle applied here, as elsewhere. The US stress tests were seen as much more rigorous than their European counterparts, reflecting a much-voiced suspicion during the conference that some European banks still had serious hidden problems. In general the US approach of acting urgently, rapidly and massively to clean up their banks was seen as better than the alternatives seen in the UK and the eurozone.
The other aspect of the equation for success was aggressive enforcement of the rules – effective supervision was at least as important as good regulation. It was no good being aware of the weaknesses in the system if no action followed.
A much discussed point was whether more structural reform was needed to deal with systemic risk in financial institutions. Many participants pointed out that some of the banks considered too big to be allowed to fail at the time of the crisis were now even bigger and more dominant in their markets. Not only had the issue of too big to fail not been addressed, but these banks were also now too big to bail for cash-strapped governments. Some thought this was a real problem. The political will to tackle it seemed to be absent, which suggested that the political will to take the necessary action if one of these major institutions did get into trouble would also be very hard to find. Others suggested that the issue could not be solved in any simple way. Some major financial institutions would inevitably remain too big and systemically important to be allowed to fail. The trick was therefore to ensure that weaknesses and risks were addressed early, so that the issue of failure did not arise. The simulations of failure insisted on by some regulators were seen as having been helpful in this respect.
All this was connected to wider reflections on the nature of the financial sector. Its basic purpose was to optimise allocation of capital and savings productively, for the benefit of individuals and companies, but this often seemed to have been lost from sight. Should ‘ordinary’ banking be regarded as a kind of utility service for individuals and corporations, and be treated and regulated accordingly, including by separation from more speculative/risky kinds of financial market activity?
Again most of the experts among the participants thought not. The Volcker, Vickers, Liikaanen and similar proposals to break up the big banks, or ring-fence “retail” from “investment” banking, were not necessary or likely to be effective in fixing the problems they were designed to address. Banking and wider financial markets were intimately linked and could not be artificially separated, though depositors’ funds certainly had to be protected. We heard strong defences of the universal banking model from some participants. In any case the wrong measures could simply drive more activity into the largely unregulated shadow banking sector. Some hedge funds were already so big that they could be said to present systemic risks. Diversification of big banks, not break-up, was the answer. Market and regulatory forces would drive out over-risky activity from banks, if the steps taken so far were pushed further, and if they were implemented and enforced systematically and energetically. However, even some of those taking this view accepted that these were big ifs.
Others saw the size of the sector as disproportionate, eg at 10% of the US economy, compared to the financial intermediation service it was providing. The size and volume of transactions in some financial markets, for example foreign exchange, were so much greater than what was needed for the conduct of normal international business that the vast majority of it had to be speculative and unrelated to real economy needs. We needed to get back to a situation where socially useful activity and reasonable profit could be combined. “Banking should be boring.” More structural reform was therefore needed to reduce the risks of the next crisis, There was also a need for more structural reform of the financial markets themselves. This was not happening.
Many round the table, expert and non-expert, condemned the ethos, or lack of it, of much of investment banking, which had leaked across into more traditional banking activities. There was no reason to suppose that such trading floor mentalities had gone away.
The spectre of the so-called shadow banking sector hung over a good deal of our discussions. Some believed that regulators needed to take a much closer interest in it, given its size and range. There would be little point in sorting out the regulated institutions if the risks were simply pushed into darker corners. Others, while recognising the risks, argued against restricting competition to the traditional banks through excessive regulation. It was good that, spurred on by the lack of traditional bank lending as a result of the crisis, new products and ideas were appearing. For example crowd funding and peer-to-peer lending were growing usefully, even though still small in relative terms.
Restoring trust in the system
We were much preoccupied by the issue of trust and confidence in the financial sector. The initial stages of the crisis had been characterised by lack of confidence between financial institutions themselves. This had almost led to catastrophe. The situation was now much improved, as a result of higher capital ratios, greater transparency, and widespread cleaning of balance sheets. But the issue had not disappeared altogether, as shown by the continuing suspicions about some European banks, including some of the largest ones.
We spent most time on the question of public, press and political trust and confidence in the system. We noted first of all that lack of such trust and confidence was not a global phenomenon, but was rather characteristic of most developed countries (closely correlated to the impact on ordinary people of the effects of the financial crisis). The reputations of financial institutions in most of Asia, Latin America and Africa had not suffered in the same way. The so-called global crisis had not in fact been global. Likewise the image of banks in Canada, where past caution had averted the worst consequences of the crisis, had also been relatively unaffected.
We also noted that, even in those developed countries badly hit by the financial crisis, while bankers certainly enjoyed a poor reputation, they had only joined an existing group of poorly regarded professions such as politics and journalism. The loss of credibility of previously well-regarded institutions and actors was a much wider problem than just the financial sector. Moreover, polls tended to suggest that, while people in countries like the UK took a dim view of bankers as a whole, they still tended to trust their own bank and their own bank manager. This suggested that it was the media and political discourse rather than personal experience which lay behind a lot of the acrimony against the financial profession.
We tried to distinguish between trust, which reposed on faith in the system and the people who operated in it, and confidence, which did not require you to like or even necessarily trust the operators, but was based on objective controls of the system which made you believe that it would not let you down. Confidence was probably easier to re-establish than simple trust, particularly if most people continued to believe that their own savings were reasonably safe. But we also produced an equation, borrowed from arms control, to suggest that Confidence = Trust + Verification. If trust were low, more verification was needed, in forms such as greater supervision, more stress tests and more batteries of compliance lawyers.
Opinions differed on how much all this mattered. Some thought that bankers had never been popular and were never likely to be. So the search for better poll ratings was a waste of time. Bankers should just get on with doing their jobs better, which should in any case help their image over time. Others worried that the basic lack of trust and confidence visible in some countries was a threat to business and to the recovery, which bankers needed to address more proactively. Efficient economies needed efficient banks and banking systems, and someone had to be saying this. So why did most bankers seem not to be ready to speak out in defence of their own profession? They could for example point out that most people only owned houses because they were able to benefit from mortgages, and that businesses could not function without effective banking systems to help them. Surely it was time for bankers to stick their heads above the parapet and speak up for the value they offered to society? Politicians needed to do the same, despite the populist temptations. Everyone needed banks, and was affected by what they did.
We also looked at where the lack of trust came from in the first place? Apart from the simple fact of the crisis itself, for which bankers were largely blamed, two basic causes were emphasised: remuneration and accountability. There was no doubt that most people thought the sums available to bankers for their personal remuneration were exorbitant, and a long way out of line with what could be earned elsewhere. They were a significant contributor to wider income inequality in countries like the US and UK. Public opinion was not convinced that remuneration for bankers was the result of any exceptional skill or talent, which might make them more tolerant, as they were for example over the huge earnings of sports stars or IT entrepreneurs.
Moreover, very few of those who had presided over the massive mistakes of the crisis, which had hit many ordinary people where it hurt in terms of lost jobs and prosperity, seemed to have suffered much for what they had done. Virtually none had faced prosecution or prison, and even those who had lost their jobs hardly faced penury. Moreover their institutions had been bailed out by the taxpayers at vast expense: the logic of a situation where profits were private but losses public seemed indefensible.
European participants tended to be more worried about these points, particularly remuneration, than those from the other side of the Atlantic, but the overall concern about them was widely shared. Most nevertheless thought there was not much which could be directly done about either point. Legislative action to cap remuneration was not seen as an effective way forward, especially given the global market for talent. Rewards in the sector were in any case likely to remain high, since skimming off even a very tiny percentage of financial transactions yielded vast amounts of money, given their number and volume. But “bail-innable” rewards were one useful way forward, providing incentives of the right kind.
Otherwise better communication from bankers, above all to their customers, was certainly part of the answer. But it would remain uphill work – someone pointed out that it had taken until the 1960s for bankers to recover from the stigma of the 1930s. There was also bound to be a continuing flow of bad stories about banker behaviour arising from the crisis, on the lines of the LIBOR fixing and London ‘Whale’ sagas, as the authorities caught up with some of the worst excesses.
Avoiding future crises
Against this background, how well-placed were we now to avert, or at least manage better, future financial crises? The majority view seemed to be that financial crises of one sort or another were inevitable. They had always occurred from time to time, and there was no reason to suppose that would not continue. It would remain very hard to predict where the next crisis would come from, but experience suggested it would be from an unexpected direction. Group-think had convinced the markets before the crash that they had learned how to manage risk. It was not certain that we were less vulnerable to group-think now than before. But risk could not be removed from the system in any case. The question was therefore less about prediction than about early diagnosis when things started to happen, speedy remedial action, and above all system resilience.
So how good were the current surveillance systems, and who would be best placed to spot the next big problem first? Most thought that we were now much better at watching the markets. The US had set up a new group, the Financial Stability Oversight Council (FSOC), to bring together the expertise from different institutions in an attempt to improve horizon-scanning. This was a useful initiative, even if it would have been better to see a more radical consolidation of the plethora of official bodies, and FSOC had no powers as such. Internationally, the Financial Stability Board also offered a useful platform to spot problems as they began to arise. But it was still likely that traders in the market would sniff out trouble before anyone else.
In any case the crucial points were the capacity to take swift, decisive action once a problem was spotted, and the ability of the system to absorb and overcome shocks. There was a degree of confidence that we were in a better place from both points of view than last time. If that were true, the next financial crisis would not need to be anything like as deep or as devastating as the last one. But some pointed out that, for example, the housing markets in the US and round the world remained huge and a potential source of major trouble. The last crisis had at its heart one of the most basic financial products: mortgages which were so lousy that they should never have been agreed or leveraged, without any transparency, as they had been. Governments had shared some of the responsibility by encouraging risky house-buying for political reasons. This could too easily happen again. Moreover personal indebtedness in many countries was an accident waiting to happen when interest rates went up, as one day they would.
However, there was one major respect in which we were in much worse shape to face a crisis now than before 2008: most governments had no more fiscal room for manoeuvre for the foreseeable future. Government bail-outs on the scale of those seen in 2008 and subsequently were therefore out of the question. That safety net no longer existed. Moreover many central banks had also loaded up their balance sheets. Solutions would therefore have to come from elsewhere if we did face another systemic crisis soon – hence the importance of bail-innable instruments. But would this be enough if we faced another disaster scenario?
The big issues
As I have suggested, there was an interesting degree of cautious optimism on show from many of the experts around the table not only that we were over the worst of the present crisis, but also that we had begun to put in place effective mechanisms to help mitigate/deal with future crises. But not everyone listening to the debate came away as reassured as that might suggest. Was patching up the lousy system we had had before really an adequate response to the scale of the crisis we had been living through?
We saw the biggest problems remaining as falling into a number of categories:
- Complexity: the size and volume of the financial markets made understanding what was happening ever more difficult. Advancing technology and computer-driven trading were making things constantly even more complex. Failure of senior managers inside banks to understand obscure derivative products and markets had been a major contribution to the 2008 crisis, and many had sworn to avoid such a situation recurring. But it was hard to see how it could be avoided when, for some products and some markets, only a handful of traders really understood the dynamics. If things started to go wrong again, the speed of contagion could leave everyone behind once more. And if senior managers struggled to follow developments, and manage behemoths of the kind which now existed, what chance did Boards have? At a more basic level, we were doubtful that regulators of the present kind could deal effectively with the financial behemoths either. Complexity also meant that explaining the sector to the public was hugely difficult.
- Culture: there was a widespread feeling that the culture of greed – which fed excessive risk-taking, excessive profits and excessive remuneration – had not changed in some quarters. This was not something regulators or even public opinions could easily change. Ethical standards still seemed to play too little role for many. What was fair and right should be good business too. As long as for some people in the sector, earning lots of short term money trumped working for the long term survival and prosperity of the institution which employed you, and producing something actually useful for customers, we would continue to have a major problem. We had put more safety features in the car, but there were still too many people who wanted to drive it at 200 miles per hour.
- National v. International: many round the table were profoundly worried by the diversity of national rules and approaches attempting to regulate and supervise financial institutions which were increasingly global in nature. There was still no effective mechanism for international institutions like the IMF or the Financial Stability Board to call out countries which had not put in place the right mechanisms. This was highly dangerous. There were no easy solutions but efforts to rationalise the mess and improve coordination should be redoubled.
- Walls of money: the sheer amount of money sloshing around in the global system created huge risks and unpredictabilities. QE had created a financial tsunami. No-one knew what would happen when the taps were turned off and interest rates inevitably rose, but the dangers were enormous. Even more fundamental was the giant pool of funds under management round the world, in pension funds, insurance funds and investment funds of all kinds, all desperately seeking yield. The sums involved dwarfed global GDP. Even relatively small movements in this giant pool could create massive ripple effects. It was a huge irony that all this money looking for a productive home coincided with a desperate need for funds for infrastructure investments of all kinds around the world, without the two seeming to be able to find each other. Surely we could do better here, by ensuring the availability of more genuine risk capital?
- Accounting and tax policies: we had little time to explore this angle, but we noted that many national tax policies tended to favour debt over equity, which was perverse, to say the least; and that accountancy standards could make a huge difference to perceptions of solvency – mark-to-market was by no means the answer to every problem. These issues needed to be much more thoroughly considered if we wanted a genuinely integrated approach.
Overall, our debates reflected an interesting mixture of optimism, pessimism and realism. It was noticeable that the closer participants were to the sector and the system, the more positive they seemed about the prospects. If the practitioners really know best, that is reassuring. But history suggests a degree of caution about this. At the very least it suggests that those on the inside are struggling to communicate the reality of what is happening to the rest of us. We may all be victims of complexity.
CHAIR: The Honourable James Michael Flaherty PC, MP (Canada)
Member of Parliament for Whitby-Oshawa (Ontario); Minister of Finance of Canada (2006-); Minister Responsible for the Greater Toronto Area; a Governor of the World Bank and the International Monetary Fund. Formerly: Member of Provincial Parliament for Whitby-Ajax (Ontario) (1999-2005); Deputy Premier and Minister of Finance (2001-02); Minister of Labour (1997-99).
Mr Bruce Soar
Deputy High Commissioner for Australia (2010-). Formerly: Director, International Economy and Finance, Australian Department of Foreign Affairs and Trade (2004-07); Director, South Australia State Office, Australian Department of Foreign Affairs and Trade (2004-07); First Secretary, Australian Embassy, Berlin (2001-04); Senior Consultant, Price Waterhouse (1994-96).
Mr Harrison Young
Non-Executive Board Member (2007-), Chairman of the Risk Committee and a member of the Audit Committee, Commonwealth Bank of Australia, Melbourne. Formerly: Member, Court of the Bank of England (2009-12); Chairman, Morgan Stanley Australia; Vice Chairman, Morgan Stanley Asia (1997-03); Chief Executive, China International Capital Corporation (1995-97); Senior Officer, Federal Deposit Insurance Corporation, Washington DC (1991-94).
Mr Alexandre Pinheiro dos Santos
Chief Executive Officer, Securities Commission of Brazil; Federal Attorney; Professor of Business Law and Capital Markets. Formerly: Attorney General (General Council), Securities Commission of Brazil (CVM) (2005-12); Chairman, second session, UNIDROIT Committee of governmental experts on enforceability of close-out netting provisions (2013); Co-Chairman, Committee on Emerging Markets Issues, Follow-Up and Implementation of the Convention on Substantive Rules regarding Intermediated Securities (Geneva Securities Convention); Vice-President (1 of 5), Final Session of Diplomatic Conference for adoption of Geneva Securities Convention (2009).
Mr Michel Brunet
Chair, Dentons Canada LLP; Member, Canadian Bar Association. Formerly: Dentons Canada LLP: National Chief Executive Officer; Managing Partner, Montreal Office; Counsel to: GDF Suez, Trans Québec & Maritimes Pipeline Inc., Holcim (Canada) Inc., Zodiac Group; Adviser to: Caisse de dépôt et placement du Québec, RBC Capital Markets, Quebec Securities Commission; Chair, Investment Dealers Association of Canada (Quebec) panel on disciplinary matters (2000-06).
Mr L.-Daniel Gauvin
Desjardins Group (1996-): Senior Vice-President and General Manager, Caisse centrale Desjardins and Capital Desjardins Inc. Formerly: Senior Vice-President and Chief Risk Officer (2004-11), Senior Vice-President, Chief Financial Officer, Desjardins Financial Corporation; Vice-President, Corporate Finance, BMO Nesbitt Burns; Senior Vice-President Finance, Royal Trust Company; Vice-President, Bank of America Canada.
Ms Julie Dickson
Office of the Superintendent of Financial Institutions Canada (OSFI) (1999-); Superintendent of Financial Institutions, Ottawa (2007-); OSFI representative, Financial Stability Board. Formerly: Assistant Superintendent, Regulation Sector, OSFI (2000-06); Member, Basel Committee on Banking Supervision, Financial Stability Board (2002-06); financial institution policy portfolio, Department of Finance; Group Leader, Financial Institutions Practice for a national consulting firm (1995-98).
Mr William Downe
President and Chief Executive Officer, BMO Financial Group (2007-); Director: ManpowerGroup, Catalyst; Board Member: Canadian Council of Chief Executives, International Monetary Conference; Member: Economic Club of Chicago, International Business Leaders Advisory Council of the Mayor of Beijing. Formerly: Chief Operating Officer, BMO Financial Group; Deputy Chair, BMO Financial Group and Chief Executive Officer, BMO Nesbitt Burns; Vice-Chair, Bank of Montreal; President, Federal Reserve Board's Federal Advisory Council.
Mr Michael Horgan
Deputy Minister of Finance, Department of Finance Canada (2009-). Formerly: Executive Director, International Monetary Fund for the Canadian, Irish and Caribbean constituency (2008-09); Deputy Minister of Environment (2006-08); Deputy Minister of Indian and Northern Affairs (2003-06); Senior Associate Deputy Minister of Finance (2001-03); Executive Vice-President, and Associate Deputy Minister, then President, Atlantic Canada Opportunities Agency (1998-2001); Deputy Secretary to the Cabinet, Intergovernmental Policy and Communications (1996-98).
Ms Monique Jérôme-Forget OQ, PhD
Special Advisor, Osler, Montreal; Member, Economic Advisory Council (2010-). Formerly: Member, National Assembly (Quebec Liberal Party) for Marguerite-Bourgeois, Quebec (1998-2009); Minister of Finance (Quebec) (2007-09); Minister of Government Services (Quebec) (2007-08); President, Treasury Board (Quebec) (2003-08); Minister responsible for government services; Vice Rector, Concordia University; Assistant Deputy Minister of Health and Welfare Canada; President and CEO, Commission de la santé et de la sécurité du travail; President, Institute for Research on Public Policy; Columnist, The Financial Post and Les Affaires.
Mr Bob Kelly
Chairperson, Canada Mortgage and Housing Corporation, Ottawa; Board Member, Markit Group, UK; Chancellor, St Mary's University, Halifax, Nova Scotia. Formerly: Vice Chair, Toronto-Dominion Bank; Chief Financial Officer, Wachovia Corp; Chief Executive Officer, Bank of New York Mellon.
Mr Simon Kennedy
Deputy Minister, International Trade, Canada; G20 Sherpa for Canada. Formerly: Senior Associate Deputy Minister, Industry Canada, Ottawa; Deputy Secretary to the Cabinet (Plans), Privy Council Office (2009-10); Deputy Secretary to the Cabinet (Operations) (2007-09); Assistant Secretary to the Cabinet (Economic and Regional Development Policy), Privy Council Office (2004-07); Director General, Policy Planning and Integration, Agriculture Canada (2000-03); various positions, Privy Council Office, Transport Canada, and Canadian Coast Guard (1990-2000).
Dr Malcolm Knight
Adviser, Deutsche Bank AG; Board Member, Swiss Re; Visiting Professor of Finance, London School of Economics and Political Science. Formerly: Vice Chairman, Deutsche Bank Group (2008-12); General Manager and Chief Executive Officer, Bank for International Settlements (2003-08); Senior Deputy Governor, Bank of Canada (1999-2003); senior positions, International Monetary Fund (1975-99).
Ambassador Claude Laverdure
Senior Fellow, Graduate School of Public and International Affairs, University of Ottawa; Vice-President and Secretary of Canadian Ditchley. Formerly: Canadian Department of Foreign Affairs (1965-2007); Ambassador to France (2003-07); Prime Minister's Personal Representative for the G8 Summit (2002-03); Foreign Policy Advisor to the Prime Minister and Assistant Secretary to the Cabinet (Foreign and Defence Policy), Privy Council Office (2000-03).
Mr Pierre Lortie CM
Senior Business Advisor, Dentons Canada LLP (formerly Fraser Milner Casgrain LLP) (2006-); President, Canadian Ditchley; Director: Group Canam, Element Financial Corporation, Tembec Inc.; President-elect, Canadian Academy of Engineering; Director, Research Center, McGill University Health Center; President and Chief Operating Officer: Bombardier Transportation (2000-03); Bombardier Capital (2000); Bombardier International (1998-2000); President, Bombardier Regional Aircraft Division (1993-98); Bombardier Capital Group (1990-93); President and CEO, Montreal Stock Exchange (1981-85). A Governor, The Ditchley Foundation.
The Honourable Kevin Lynch PC, OC
Vice Chairman, BMO Financial Group. Formerly: Clerk of the Privy Council; Secretary to the Cabinet; Head of the Public Service of Canada (2006-09); Executive Director for the Canadian, Irish and Caribbean Constituency, International Monetary Fund, Washington DC (2004-06); Deputy Minister of Finance (2000-04); Deputy Minister of Industry (1995-2000). Chairman of Canadian Ditchley (2010-) and a Governor, The Ditchley Foundation.
Mr Tiff Macklem
Senior Deputy Governor, Bank of Canada. Formerly: Associate Deputy Minister of Finance and G7 Deputy for Canada (2007-10); Bank of Canada: Deputy Governor (2004-07); Adviser to the Governor (2003-04); Chief of Research Department (2002-03); Research Adviser (1996-2002); Assistant Chief, Research Department (1993-96).
Mr Don McCutchan
International Policy Adviser and Member, Gowlings International Strategic Advisory Group; a Director, Northstar Trade Finance Inc.; Adviser, Greta Energy. Formerly: Officer, Canadian Department of Finance; Executive Director, European Bank for Reconstruction and Development. A Board Member, Canadian Ditchley.
Mr Jeffrey Orr
President and Chief Executive Officer (2005-) and a Director, Power Financial; Chairman of the Board: Great-West Lifeco, London Life, Canada Life, Putnam Investments, IGM Financial, Investors Group, Mackenzie Financial. Formerly: President and Chief Executive Officer, IGM Financial; Chairman and Chief Executive Officer, BMO Nesbitt Burns Inc.; Vice-Chairman, Investment Banking Group, Bank of Montreal.
Mr John Stackhouse
The Globe and Mail, Toronto: Editor-in-Chief (2009-). Formerly: Editor, Report on Business; National Editor; Foreign Editor; Foreign Correspondent at Large; Development Issues Correspondent, New Delhi (1992-99); Correspondent: Report on Business Magazine, Financial Times, London Free Press, The Toronto Star. A Board Member, Canadian Ditchley.
Mr Mark Wiseman
President and Chief Executive Officer, Canada Pension Plan Investment Board, Toronto; Board Member, Canadian Coalition for Good Governance; Board Member, Capital Markets Institute; Board Member, Mount Sinai Hospital; Board Member, Right to Play International. Formerly: Executive Vice-President of Investments, CPP Investment Board; Senior Vice-President of Private Investments, CPP Investment Board; Vice President at Ontario Teachers' Pension Plan, Toronto; Vice President, Harrowston Inc., Toronto; Lawyer, Sullivan & Cromwell, New York and Paris; Law Clerk to Madam Justice Beverley McLachlin, Supreme Court of Canada, Ottawa; Chairman, Institutional Limited Partners Association; Chairman, Youth Without Shelter.
Mrs Unnur Gunnarsdóttir
Director General, Financial Supervisory Authority, Reykjavik (2012-).
Dr Ceyla Pazarbasioglu
Deputy Director, Capital and Monetary Markets, International Monetary Fund (2003-). Formerly: Vice President, Banking Regulation and Supervision Agency of Turkey (2000-03); Chief Economist and Strategist, ABN AMRO (1997-2000); Economist, International Monetary Fund (1992-97).
Mr Tomasz Chmielewski
Director, Macroprudential Policy Bureau, Economic Institute of the National Bank of Poland.
Mr Ismail Momoniat
Deputy Director General, Tax and Financial Sector Policy, National Treasury of South Africa (1995-); South Africa Representative, Financial Stability Board.
The Lord Aldington
Trustee, Institute for Philanthropy (2008-); Vice President, National Churches Trust (2008-); Trustee, Royal Academy Trust (2003-); Chairman, 2019 Committee, New College, Oxford. Formerly: Chairman, Deutsche Bank London (2002-09); Chairman, Stramongate Ltd (2007-11); Member, Chairman's Committee, British Bankers' Association (2003-09); Member, Council of the British-German Chamber of Commerce and Industry (1995-2008). A Governor and member of the Council of Management and Business Committee and Chairman of the Finance and General Purposes Committee of The Ditchley Foundation.
Mrs Sharon Angus-Crawshaw
President (2012-) and Director for Wales (2009-), Association of British Credit Unions Ltd, Manchester; Senior Government Officer, Cheshire East Council; Director, North Wales Credit Union Ltd, Llandudno (2007-); Trustee, British Credit Union Foundation, Manchester (2004-); National and International Credit Union Development Educator (DEUK 2004, CUDE 2007 and I-CUDE 2012). Formerly: ABCUL Supervisory Committee member (2007-09); Secretary ABCUL North Wales Chapter (2003-09); Trustee and Company Secretary, Dee Valley Community Partnership (2005 -09); Director, Wrexham Credit Union (2007-11).
Mr Howard Drake OBE
British High Commissioner to Canada (2013-). Formerly: High Commissioner to Jamaica and non-resident High Commissioner to the Commonwealth of the Bahamas (2009-12); Ambassador to Chile (2005-09).
Mr Richard Edgar
Economics Editor, ITV News. Formerly: Global Head of Video, Financial Times; Editor (Europe Middle East and Africa), Reuters; Frankfurt Correspondent, Reuters Television; Presenter/Reporter, BBC World Service; Business Editor, Today programme, BBC Radio4.
Sir John Gieve KCB
Chairman, Vocalink; Non-Executive Director: CLS, Morgan Stanley International, Homerton Hospital; Trustee, NESTA; Chairman, Clore Social Leadership Programme. Formerly: Deputy Governor, Bank of England (2006-09); Permanent Secretary, Home Office (2001-05); Director, HM Treasury (1998-2001). A Governor of The Ditchley Foundation.
Dr Andrew Hilton
Founder (1993) and Director, Centre for the Study of Financial Innovation, London; Board Member, Observatoire de la finance, Geneva. Formerly: Economist, World Bank; Financial advisory service, Financial Times, New York.
Professor Colin Mayer
Peter Moores Professor of Management Studies, Saïd Business School, University of Oxford; Fellow, European Corporate Governance Institute. Formerly: Peter Moores Dean, Saïd Business School (2006-11); Harkness Fellow, Harvard University; Houblon-Norman Fellow, Bank of England; first Leo Goldschmidt Visiting Professor of Corporate Governance, Solvay Business School, Université de Bruxelles; a Director, Oxera (1986-2010).
Mr Richard Meddings
Standard Chartered Bank PLC, London: Group Finance Director (2006-). Formerly: Group Executive Director (Africa, Middle East, Pakistan, Europe and the Americas); Group Executive Director (Risk); Group Finance Director, Woolwich PLC; Group Financial Controller, Barclays PLC; 3i PLC: Non-Executive Director, Senior Independent Director and Chair of the Audit and Compliance Committee; Member, Governing Council, International Chamber of Commerce, UK; Member, Indo British Partnership Network (2005-07).
Mr Peter Bass
Managing Director, Promontory Financial Group, LLC. Formerly: Executive Assistant to the National Security Adviser, the White House; Deputy Assistant Secretary of State for Energy, Sanctions and Commodities; Senior Adviser, Office of the Secretary, Department of State; Vice President, Chief of Staff to President and co-COO, Goldman Sachs & Co.; A Director, American Ditchley.
Ms Sarah Dahlgren
Executive Vice President, Head of Financial Institution Supervision Group (2011-) and Member of the Management Committee, Federal Reserve Bank of New York. Formerly: Executive Vice President, Special Investments Management Group (2010-11).
Mr John Drzik
Oliver Wyman Group (1984-): Chairman (2000-) and Chief Executive Officer (2006-).
Mr Reuben Jeffery III
CEO, Rockefeller & Co Inc., New York (2010-); Non-Executive Director, Barclays Plc
(2009-); Member, International Advisory Council, China Securities Regulatory Commission. Formerly: Under Secretary of State for Economic, Energy and Agricultural Affairs (2007-09); Chairman, Commodity Futures Trading Commission (2005-07); special assistant to the President, National Security Council (2004-05); Goldman Sachs & Co. (1983-2001).
Mr Cary A Koplin
Managing Director, Investment Management Division, Neuberger Berman, LLC (2000-). Formerly: Managing Director, Schroder Wertheim & Co Inc./Wertheim & Co. (1966-2000). President, American Ditchley.
Dr Randall Kroszner
Norman R. Bobins Professor of Economics, The University of Chicago Booth School of Business. Formerly: Governor, Federal Reserve System (2006-09); Chair, committee on Supervision and Regulation of Banking Institutions, Federal Reserve System; Federal Reserve System representative: Financial Stability Board, Basel Committee on Banking Supervision, and Central Bank Governors of the American Continent; Professor of Economics and Director, George J. Stigler Center for the Study of the Economy and the State, University of Chicago Booth School of Business; Member, President's Council of Economic Advisers (2001-03).
Ms Rachel Lomax
Non-Executive Director, HSBC; Chair, International Regulatory Strategy group; Director, TheCity UK; Member, LSE Growth Commission; President, Institute of Fiscal Studies; Non-Executive Director, Heathrow Airport; Trustee, Imperial College London. Formerly: Deputy Governor (Monetary Stability), Bank of England (2003-08); Permanent Secretary, various UK government departments (1996-2002).
Professor Ingo Walter
Seymour Milstein Professor of Finance, Corporate Governance and Ethics, Stern School of Business, New York University; Visiting Professor, INSEAD, Fontainebleau, France. Formerly: Director, Stern Global Business Institute (2003-06); Director, New York University Salomon Center for the Study of Financial Institutions (1990-03); Visiting Professor, Free University of Berlin, University of Mannheim, University of Zurich, University of Basel, Institute for Southeast Asian Studies, Singapore, and others; Chairman of Finance, Associate Dean for Academic Affairs, and Dean of Faculty, Stern School of Business, New York University.
Mr Wamkele Mene
Chair, Committee on Trade in Financial Services, World Trade Organisation (WTO), Geneva; Counsellor (Economic), Department of Trade and Industry, South African Permanent Mission to the UN and other International Organisations in Geneva. Formerly: Deputy Director, Department of Trade and Industry, Ministry of Trade and Industry, Pretoria.
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