Answer:
When I took on the new role of CEO, Wholesale Banking in 2002, the Wholesale Banking business recorded a profit of US$800 million. By 2008 the profit was US$3 billion, which effectively meant we had doubled profits every three years.  In the first half of 2009 we delivered profits of US$2.2 billion, which is almost more than what we delivered in the whole of 2007. The keys to our continued growth have been our disciplined approach in following our client-led strategy and being able to stay open for business through the recent crisis.

Our traditional business of commercial banking including flow FX are the foundations of the Wholesale Banking business and are performing steadily, contributing over half of all client income. Both lending and trade were up strongly in the first half of 2009 due to increased volumes and margins remaining at high levels.

Answer:
Well, all banks have been affected by the global crisis. What you can say though is that the crisis offered a number of opportunities which we have been able to take advantage of.

At Standard Chartered we have a strong strategic focus on our clients in our key markets. We also have a long history. We learned a lot from the Asian crisis of 1997, for example. We have been able to navigate through the current crisis by keeping focused on our strategy and on managing our capital and liquidity. This is what has enabled us to seize the opportunities out there to strengthen our relationship with our clients and to hire new teams and talent to further increase our industry coverage and product delivery capabilities.

Externally, we are seeing our success recognised by analysts and investors and our profile with international media continues to grow as we move up in the rankings and league tables across almost all of our product capabilities.

Answer:
A large part of the crisis is linked to the over leverage of the banking sector and more specifically to the over leverage of consumers. In the mid-1990s, companies had relatively low levels of gearing and were more cautious in dealing with customers. The low interest rate policy adopted by many financial institutions around the world and the banks’ over leverage linked with increasingly sophisticated financial products led to this crisis.

Answer:
The fundamentals of banking lie always in the good management of the balance sheet. Banking is an industry of confidence. We should not forget that we are the custodians of our clients’ money and as such, we need to inspire confidence amongst our clients as we have an obligation to look after their savings. If this confidence ceases to exist, things will go wrong. We need to own that trust. I also believe banks need to be conservative in their management in order to preserve the confidence of our depositors. Likewise, we need to maintain the confidence of the regulators and the governments where we operate.

Answer:
When you look to the future of UK, or anywhere for that matter, you need to do so within the global context. Today, the world gross domestic product (GDP) is estimated at being around USD 62 trillion, of which USD 14 trillion comes from the United States, USD 18 trillion from Europe and USD 5 trillion from Japan. The G7 countries contribute up to 60 per cent of global GDP.

People can become obsessed about the rate of GDP growth. Here, we need to recognise that the GDP growth rate of these economic groups has a huge impact on the world GDP growth. So even a slow and steady growth in the West will produce quite a significant change in the world.

The second factor to look at in understanding the current -- and future -- situation is the financial stimulus packages and the timing of their withdrawal in the western economies.

We must bear in mind the three elements in these packages: the liquidity aspect, the interest rate component and the element of fiscal policy.

The crucial points are how to deleverage the banks and when to withdraw the stimulus packages, particularly in a context where the banks are still over-exposed and that unemployment is a political issue. That’s why the whole matter of economic recovery is also a highly political one. In Asia and in Middle East countries, the situation is somewhat different as they have enough money to stimulate their economies.

Answer:
Yes indeed, in Singapore and Korea, the problems we are seeing are linked with prices and asset inflation. You can see asset inflation in the residential property and stock market. China is restricting its bank lending and India raising its bank requirement reserves to contain the risks of inflation whilst still maintaining strong economic growth.  And yes, this is a difficult balancing act, with very real risks of asset inflation on one side and slow down in economic growth on the other.

And then there are the issues that relate to currency. From a long-term perspective, the dollar will weaken but this will not be in the interest of China and the US in the short term. If the US allows their currency to weaken too much, this will be translated in rising commodity prices and imported inflation. But the danger is that they have to increase interest rate earlier, which can jeopardise the economic recovery.

The Chinese economy is primarily export based. If the authorities allow the Chinese currency to appreciate in the short term, it creates another problem for a significant part of that economy. It is clear that at some stage, the Chinese authorities will allow the currency to rise. We believe this could happen around mid-2010.

Answer:
This is the big debate right now and I don’t think anyone is clear about the fate of the greenback. What is clear presently is that the dollar is the reserve currency because it is the currency of the world’s biggest economy. However, as the dollar loses value, many countries have concerns about keeping their reserves in dollars. In response, we see China investing in commodities, mainly in energy. The debate has only just begun and it will have a long way to go. It is not yet clear whether people understand the consequences of this situation.

Answer:
Gold forms part of the wealth of a country. Concentration in one particular commodity is never wise. China is today buying oil because it is a long term resource. It makes sense for China to buy resources, invest in Africa and build long term relationship with developing countries.

On the other hand, you would not look to buy US treasuries now in view of the current low interest rate. At USD1,300 an ounce, gold is still a good buy as its price is on the rise. At the end of the day, it is always a question of balance. Any good investment strategy should be a balanced one. And, at the country level, you should not speculate with the official reserves.

Answer:
Yes, I think so. But this relation applies to any commodity.

Answer:
Each country needs to look to its own situation to decide what it should do. As banks have benefited from big financial packages, the problem is that the funding deficit of banks has become that of governments and this is unsustainable. Much depends on the timing of the withdrawal of the stimulus package. If some countries withdraw it too early, they can stifle the economic recovery. But if they take too much time to remove it, countries can encounter inflationary pressures. It really needs to be is a case-by-case solution.

Answer:
We look to be coming off the bottom. We expect to see a slow and steady growth throughout the rest of 2010. That said, I would caution that there is euphoria in the market, which is not sustainable. For example, on the world markets, prices do not reflect the economic reality. I think that much of the US economic growth registered in the fourth quarter of 2009 would be due to the effects of the stimulus package. Sluggish growth in the first quarter of 2010 would not surprise me because much of the optimism out there is not based on economic reality. We need to address this disconnect or people will soon be disappointed and this may increase risk aversion and cause the dollar to strengthen.

Answer:
Clearly, this is what regulators are focusing on at the moment. If you look at Basel II, we have seen that it was clearly a fundamental mistake not to regulate liquidity management. Just think, Northern Rock had an asset ratio of over 300 per cent. This is also the case for many banks whose assets base has grown faster than liquidity. The big challenge for banks in the future will be the management of balance sheet and liquidity.

Banking regulations need to change because for the most part they operate at a national level whereas the world’s economy requires banks to be able to work increasingly at an international and even global level. Notwithstanding the setting up of the world Financial Stability Forum, we don’t have a regulatory system for the financial sector that recognises the globalisation of the economy.

As clients and banks become more global, we need to have the appropriate regulations that satisfy the requirements of the banking sector in a globalised world given the international nature of our operations.

Answer:
It is clear that in an increasingly globalised world, there is a need for improved banking regulations. We need an international system of regulation to better manage our liquidity. We need to ensure that the changes we will put in place will improve our regulatory environment.

The reforms of the financial sector in the Asian economies following the Asian crisis led to the boom which followed. Such a correction had to take place in order to sustain long term growth. We should expect the same for the world economy today. We need an international financial architecture that supports the long term growth of the world economy.

Answer:
We are already seeing asset inflation with the rising property prices in Hong Kong and in Singapore. Banks in Asian countries are extremely liquid as a result of an increase in deposits from customers. On the stock markets of China, Singapore and Hong Kong, asset prices are already inflated due to the over leverage of stimulus package. That’s why China and India have respectively raised the lending rate and the reserves requirements.

Answer:
The Mauritian economy, like those in many other countries, is adapting itself to the changing world. It is becoming an important regional centre with its dynamic and vibrant offshore sector. The island can boast of being on the white list of offshore financial centres. Many cross-border investments are flowing through Mauritius into India by taking advantage of the taxation treaty between the two countries. Here, Mauritius is competing with Singapore which has an equivalent tax treaty with India.

Mauritius has an opportunity to rebalance its foreign investment sources, particularly towards Africa. Africa is central to the growth of the world in terms of energy and resources, and Mauritius is a natural place to establish regional companies to service the African continent. With its connecting links with Africa and India, Mauritius can look to how best to maximise its comparative advantages to position itself as a transit point. Of course, there are always number of a factors involved. In this world, if you are a slow adapter, you will end as a non-adapter.

Answer:
Mauritius must think big, quick and differently. It is not a simple matter of copying what others are doing. For example, Singapore has developed to become a logistic and regional passenger hub. Mauritius needs to find its own path. Singapore may be two times more populated but Mauritius is three times bigger in size and is positioned with Africa’s commodity and energy markets at its doorstep. So, it is not a matter of emulating Singapore but of Mauritius using its own strengths to achieve its goals.

Answer:
In the long term, nothing is resilient in this world.  The Mauritian economy has shown good resilience through the economic crisis; the challenge is creating long term resilience by adapting and creating a competitive advantage from the changing world.  That has only just started and if it does not get ahead, it goes backwards, that is the real danger.

Answer:
Mauritius has a number of solid banks that sustain the economy. The banks are well managed and are financially sound. However, the country needs to broaden the prospects of this industry. It must look to the East to attract foreign capital. For example, at Standard Chartered we raise capital in Hong Kong and India. Mauritius too must and can adapt to the new global economic order.

Answer:
Standard Chartered opened its office in 2002 and has since grown into a full-fledged bank offering a wide range of services. We have made a good start and are doing well. We are one of the leading international offshore banks in Mauritius offering a wide range of Wholesale Banking products. The Bank’s activities focus on international banking business, servicing Standard Chartered Bank network clients as well as international clients referred by local management companies.

Answer:
Our focus is on offshore companies. We assist local banks in trade finance and in investment flows. We have a well diversified portfolio of corporate clients with offshore operations making up our core business.