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Dear Readers

Many readers have asked whether there are any recent research articles based on EAGLES and SRQ. The straight answer is there are none.
The reasons are:

1. We need to plan carefully how, where and when we present our research.
   The banking sector in every nation is a powerful lobby group.
   (My travel visa was nearly revoked twice in 2 countries for presenting research papers on the macroview on weakness of the banking sector. No bank names were disclosed. Many central banks do not wish to hear external researchers telling them the bad news).

Please read the article below then proceed to the test question on assessing your knowledge of environment management, climatic change and nature of emerging economies:

The future looks bright for social entrepreneurs needing funds to support their causes. An interesting article below.

By Channel NewsAsia

SINGAPORE: Plans are underway for Asia's first social stock exchange to be set up in Singapore.

US philanthropic organisation, the Rockefeller Foundation, is donating a sum of money to support the establishment of the social stock exchange. It is awarding US$495,000 to the Singapore-based agency, Impact Investment Exchange (IIX).

Board Secretary: We have intense discussions at Board meetings. And we waste time engaging in debates. As a Board Secretary, what can I do to make the boards function more effectively? And that my secretarial team becomes efficient and effective?

Leadershipcorp: The intense discussions are good, provided the discussions are directed to ISSUES, and not to individuals. Some basic conditions for an effective board are Maturity and SKEs.

Board Secretary: I understand maturity as ability to discuss without getting into personal fights. Is that right?

1. Global Crisis and Policy Responses

The global recession appears to be at, or reaching, the bottom of the trough, so there is a good chance recovery will emerge. When will the recovery take place depends on where you are located. Growth in Asia seems revived. The US economy has somewhat stabilized. But Europe has signs of suffering from huge hangover.

The three countries in Indochina (ie Vietnam, Cambodia and Laos) have a population of about 96 million. Only about 20% have bank accounts and therefore access to banking services. However it is estimated that that there are 96 million phone accounts. If the sums are correct, then there lies a great opportunity to transact financial services using the phone.

There will come a day when a mobile or traveling banker will trudge into the rural heartland where many farmers live, instead of just sitting in his office. When the banker meets the farmer the conversation may go like this:

Many CEOs micro manage. They like to "pull up the roots to check whether the tree is healthy, not realizing that this action may kill the tree".

I have spoken to many CEO and their reasons for micro-managing are that:

1. CEOs like to keep themselves well-informed of the company's daily operations;
2. CEOs do not trust the staff sufficiently that they can do their assigned duties;
3. CEOs cannot re-assigned or remove the under-performing staff, so he has ensure that
   they do their jobs;
4. CEOs have under-skilled managers who cannot perform their duties;

Many analysts or bank inspectors use the CAMEL for analyzing banks and not knowing the disadvantages of the model. Here is an expose of the potential loopholes and where the EAGLES benchmark may excel.

Demise of CAMEL?

In the CAMEL, analysts assess five key aspects of the operations of a financial institution – Capital, Assets, Management, Earnings and Liquidity – rating them on a scale of 1 to 5. An overall rating of 1 is best while a rating of 5 implies a bank being laden with existing or potential problems.

Since activity based costing (ABC) was first propounded in 1987, many consulting firms have advertised their specialist services and experiences in the implementation of ABC in the banking sector.

But the dearth of available data, published or otherwise, suggests that ABC is not as widely understood and practiced in the financial services sector as one may be led to believe.
Two reasons account for this: firstly, banks find it difficult to define their products and secondly, the banks think that the dififculty may not warrant the cost.

The profitability of any given relationship to the bank can be reflected in the customer profitability analysis.

The financial statement analysis can only make an evaluation of the financial strengths and wekaness of the borrowing client and have little to do whether the customer is profitable to the bank.

While the customer is profitable in their own financial statments. But in its dealings with the bank the bank's cost of servicing the customer may far exceed the revenues derived from the customer.

It is therefore important to compute customer profitability in lending operations.