Nearly a decade after the onset of the financial crisis and following billions of dollars of costly regulatory reforms, some fundamental questions are being asked about how prepared the financial system is to combat future financial crises. Quite simply: Is the global financial system prepared to fend off another crisis?

The World Economic Forum in Davos is one of the places where today’s leaders in finance gather to ponder such questions. When it comes to financial stability, the Davos minds paint an uncertain picture – particularly in Europe.

Jeroen Dijsselbloem, president of the Euro Group and finance minister of the Netherlands, believes Europe currently sits in a very vulnerable position. “Our shock absorption capacity in Europe is still far to small. We are still over-leveraged in households. Many SMEs are overleveraged. Governments still don’t have a lot of fiscal space. … If the next crisis were to come, who is going to buffer the economic shock? (read more…)

Fintech stands to have a profound impact on the financial services industry, but how that impact will take shape was the key topic during Wednesday’s “Transformation of Finance” panel discussion at the World Economic Forum in Davos.

Morgan Stanley Chairman and CEO James Gorman conceded that regulation still crowds on his inbox, but stressed the importance of keeping an eye on fintech. “If you are not focused on how some of these innovations are disrupting different parts of the financial system and how you can embrace them and use them to win business, not just defensively, then you are not doing your job,” Gorman said.

Deutsche Bank Co-CEO John Cryan said technology will revolutionize payments so dramatically that he predicts cash won’t exist in 10 years because it is “terribly inefficient and expensive.” Cryan added that he expects block chain technology to be used not only for financial transactions, but also for digital identity purposes. (read more…)

Terry Duffy is the Executive Chairman and President of CME Group, which is hosting its annual Global Financial Leadership Conference next week in Naples, Fla. Mr. Duffy chatted with SmartBrief and shared more background on the GFLC.

The Global Financial Leadership Conference is now in its 8th year … How has the event evolved?

The GFLC has evolved into one of the foremost events for leaders in our industry. This annual, two-day conference brings together some of the greatest minds in global economics and politics to discuss significant issues impacting our world. Over the years, we’ve featured former U.S. presidents, foreign heads of state, global business luminaries, and much, much more.

Virtually every speaker at GFLC comes from a field dealing with increased volatility. From geopolitics and financial markets to natural resources and media disruption, what are some of the keys to effectively handling volatility?

Volatility is a component of every market and has been since they were invented. (read more…)

Financial institutions need to focus on resilience and sharing information about cybersecurity, which should be treated seriously as a matter of national defense in the US, said experts and regulators at the Securities Industry and Financial Markets Association’s Annual Meeting in Washington, D.C., on Tuesday.

“We need national defense priority on cybersecurity,” just as with nuclear defense, because no company has the budget to battle sovereign nations launching cyberattacks, said Ronald Kruszewski, chairman and CEO of Stifel Financial.

Jim Rosenthal, chief operating officer of Morgan Stanley, suggested the Reserve Officers’ Training Corps, or ROTC, could train students toward careers in cybersecurity to help make up for the US’ talent gap in that area.

Treasury Secretary Jack Lew and Securities and Exchange Commission Chair Mary Jo White reiterated the need for companies to share breach-related information among one another and with the government. Doing so will help other firms detect wider patterns and defend against the kinds of breaches that have occurred to other organizations, Lew said. (read more…)