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Massive Consolidation in Banking Industry Needed

DUBAI — A massive consolidation in the banking industry is needed, according to Lord Charles Falconer, a former Lord Chancellor of the UK.

“If you look at what happened in London is the best example, where number of banks have shrunk. Even in America, a similar phenomenon has taken place. The way the world regulators are dealing with the bank, is simply seeking to secure to stay alive by keeping the world economy growing,” said Lord Falconer at the Dubai International Financial Centre here on Tuesday.

Lord Falconer gave his insights on how the global financial crisis is having its impact on governments across the world and how to help them develop creative approaches for dealing with the crisis.

At the seminar titled ’The impact of the Economic and Financial Crisis on Politics in the USA, UK and Europe’, Lord Falconer’s address focused on how the governments of the world are seeking to address the current crisis and what effect it is having on their policies and survival.

“My own judgment is that people would be that keen to get into the banking world, and so I see no prospect of their being diversification in the number of banks,” said Lord Falconer.

He added that the role of banks is vital in the world economy and hence, it needs a strong, brave and popular political leadership. Lord Falconer said that there is need for a focused political leadership to any country for a strong economy growth, adding that he is optimistic that US President elect, Obama will address the global crisis issue very smartly. “US President elect, Barrack Obama represents the most significant hope we get out of the economic crisis, quicker rather than slower, as America leads the world in different ways,” said Lord Falconer. On the issue of bailout of banks by certain countries was completely a right thing to do at this critical moment, he said because the whole system depends on banks and if the banks collapses, than the whole system collapses. Abdulla Al Awar, Managing Director of the DIFC Authority said: “This session is a great opportunity for members of the DIFC community to benefit from the breadth of experience and wisdom that Lord Falconer has built up during his impressive career.”

abdulbasit@khaleejtimes.com