Between expectation and regulation

"Between expectation and regulation – the future of business models in the financial services industry", lautete der Titel seiner Antrittsvorlesung, mit der er sich und sein Fachgebiet am 19. Mai 2009 der Frankfurt School vorstellte.

Prof. Dr. Hermann A. Wagner

Between expectation and regulation – the future of business models in the financial services industry"
Business models define the logic why investments are undertaken, revenues are created, operations are running in a certain way, and how that all brings value. Value to whom? Looking at the financial services industry today, the expectations of investors, private customers, the real economy, management, politics and, last but not least, the public seem to be extremely diverse.

• Who defines the right to exist for a financial service or a financial institution?
• How should a financial service be regulated?
• Are risk-taking and risk-trading still valid parts of a financial service, even if it could blow up a whole financial system?
• Does the growing complexity of financial innovations still meet the expectations of all participants?
• Are scale and scope of financial institutions still controllable?
• Who is ready to meet expectations – conglomerates, specialized institutions, global players or regional banks?
• What is the adequate risk and return profile for a financial service?
• Is there a trade-off between profitability and sustainability?
• Can regulation be balanced in a way that systemic breakdowns are avoided without nationalizing a whole industry forever?

The impact of these questions on the financial services industry and financial systems is evident. The lecture reflected upon different expectations, conflicts, trade-offs, the role of the industry and capital markets regulation as well as on accounting to give an estimate on the future of business models in the financial services industry.