The document discusses current economic and social challenges facing the financial sector, including lack of confidence, stalled economic growth, and new regulatory requirements. It argues that restoring confidence, promoting higher growth through responsible economic policies and citizen behavior, increasing capital reserves to meet new rules, and stronger fiscal and political integration in Europe could help address these challenges. Individuals should contribute through developing strong ethical values and entrepreneurial thinking. Working in investment management could provide opportunities to help reshape the financial industry.

2. • Tougher regulatory framework aimed at preventing future state bail
outs, stalled economic growth in developed markets, scarce levels of
integration among people of different countries and cultures, and continued
uncertainty over the future of the Eurozone, have all weighted heavily on the
financial sector recently, although not so drastically on Investment
Management firms.
• In the following slides, I would like to illustrate my views and to explain in
some details the challenges that the financial sector and many individuals are
currently facing, and how these can be solved by both institutions, like
governments and central banks, and individuals, like me or any other person.

3. Current Economic & Social Challenges
How institutions /governments How individuals, and me in
should intervene with respect to particular, should contribute to
such problems resolving such problems
Result: Shift towards a better financial
world and a better economic and
social time

4. • Lack of confidence among • Eurozone recession , US
investors and throughout fragile recovery and BRICS
markets worldwide, with a slowing economies are all
subsequent contraction in heavily impacting the
liquidity financial sector
“Result”:
Eurozone
and World
Crisis
• Tougher regulatory • People divided by different
requirements for financial cultures, languages and
companies are affecting habits; politicians still not
and reshaping the financial considering this topic in
service industry their to-do list. This causes
inefficiencies

5. (i) Uncertainty
• The lack of coordination among the
governments of EU countries is not helping to
build the level of confidence that is essential to
reactivate Europe’s finance markets.
• This crisis will hardly begin to show signs of easing until
investors regain their confidence in banks and financial
institutions. In other words, people need to see that banks are
run by professional and reliable individuals, with a plan of
action to make them profitable, in a transparent and crystal
way.
• Part of the reasons behind the financial crisis lie in the poor
and flawed ethic of some professionals (who caused the credit
crunch in 2007), whose principles and core values have been in
some cases forgotten or even lost, with a resulting loss of trust
among investors.

6. (ii) Stalled Economic
Growth
• The US economy is showing alarming signs of fragility. A
big threat for the country is on sight: the so-called
“fiscal cliff” could produce in January 2013 one of the
largest fiscal contractions in the country’s history
(approx. -3% of GDP).
• The Eurozone is experiencing one of the worst
recession in history; debt levels are particularly high in
many nations, liquidity is scarce and confidence is low.
• Politicians have so far laid down some ideas and
guidelines that would help to reform and reshape
Europe, and the ECB has intervened heavily into the
economy to reassure markets and buy time; but
without further commitment by every single citizen
and government, there is no way to get out of this
tough economic turnaround.

7. • After the financial crisis began, there has been an
increasing focus on banks and other financial
institutions to provide some guarantees and safety to
governments, investors and the general public.
• This includes tying up some capital and liquid assets
in order to meet the higher demands of
regulators, hence proving to external parties that
these financial institutions are solid, reliable and in
good health.
• On their parts, banks and other entities have been
forced to increase their reserves and write off bad
debts, especially in the US. The result has been less
credit given to citizens and enterprises, with a
consequent reduction in spending and investments.
(iii) New Regulatory
framework

8. • There is no cohesion among countries
around the world, especially in
Europe, and there is no sight of social
responsibility yet.
• In Europe, even after years of common
market and direction, cultural, historical
and ideological differences still exist.
Diversity, an important feature that is
eradicated in Europe, should be seen as
a gift, not a weakness.
Unfortunately, governments and other
institutions push forwards mainly
national interests, with the result of not
improving anything.
• Important choices and reflections
should be made, not only to improve
the present situation, but also to give
future generations a better economic
and social prosperity. (iv) Lack of Integration

9. (ii) Promotion of higher
growth through wise
economics policy and
responsible behavior by
citizens
(iii) Increase in
capital and liquid
Eurozone
(i) Restoring of resources to meet
and World
confidence level new requirements
Crisis:
and avoid future
“Solutions
meltdowns
”
(iv) Stronger fiscal and
political union; consistency of
choices and central
supervision on governments’
finances

10. • To improve confidence levels it will be necessary to
establish supervision mechanisms that would prevent the
same situation from arising again, or at least make it less
(i) Restoring of likely to happen.
confidence level
• Central Banks can also help in this process of reaching a
mechanism by which banks will provide more liquidity to
companies and individuals, thus stimulating investment
and spending.
• To increase confidence further and faster, people should
be taught about corporate responsibility, a concept which
essentially means looking beyond traditional rules and
creating new opportunities by communicating with other
parties.

11. (ii) Promotion of higher
growth through wise
economics policy and
responsible behavior by
citizens
• A first step would be to use the European stability
mechanism to calm the markets and push down the
spreads of some European countries.
• Each government should try to reduce its own debt, a big
task for some, including the US, and promote growth
internally.
• This should be backed up by loose monetary policy by
central banks, particularly in Europe, at least in the first
place.
• Higher growth rates in Europe will also boost growth
elsewhere, for example in the US or emerging countries.

12. • As mentioned earlier, tougher capital requirements imposed on
financial firms have been a direct response to wrong behaviors of
industry professionals in the past decade.
• These new financial restrictions, synthetized in Europe by Basel III,
have been made up and will be applied to banks and some other
financial institutions, the main responsible for the credit crunch of
2007.
• These new requirements, apart from being difficult targets to be
met by most investment banks and other financial firms, may be
actually useful in order to restore the pre crisis level of credibility in
the financial markets within the developed world. They will provide
a more stable future for the financial sector, once put in place, and
will also increase confidence levels. (iii) Increase
capital and liquid
resources to meet
new requirements
and avoid future
meltdowns

13. • Politicians in Europe should primarily start and
implement a process of greater integration; the
first step would be to push forward to a
common European Authority/Government, or
at least some governing entity that could give
directions to all member states and could
conduct fiscal policy, independently from
national interests.
• After this fiscal unification, a proper monetary
policy should be followed by the ECB in order
to solidify and complete economic and social
integration. Ideally, the result should a sort of
“United States of Europe” .
(iv) Stronger fiscal and
political union; consistency of
choices and central
supervision on governments’
finances

14. Successful Asset Manager
Contributing to reshaping the
industry
Work Experience as Investment Analyst
Forward looking
Responsible Concept of
Core values: thinking:
corporate and Diversity and
redefinition Innovation
social behavior Entrepreneurship
and creativity
…Ethic…
MSc in Finance at IE

15. Pillar One:
Core values:
redefinition
• Values, such as those highlighted in the picture, are deeply rooted in me. I
have been able to develop them during my past experiences, but I am
sure I will have further chances in the future, and IE can be a first step to
develop and solidify my ethic and core values even more.
Redefinition of Core Values: Ethic

16. • I want to be at least as
innovative and forward thinking
as those who are currently
reshaping the financial service
industry, and investment
management with it; no
organization other than IE can
better drive me towards that.
Pillar Two:
• I want to learn how to “think
Forward looking outside the box” and how I can a
thinking: significant impact in the financial
Innovation industry.
and creativity
Innovative and Creative
thinkers
Redefinition of Core Values: Ethic

17. • Both social and corporate responsibility are needed to create value in
today’s environment and improve current economic situation.
• These two key principles, which characterize IE’s philosophy, are of
vital importance for any individual, particularly for the leaders of
tomorrow.
• Particularly in the financial industry, there is a need of responsible and
value-trained people, whose behavior can remodel corporate
management and social interactions.
Corporate and Social
Pillar Three:
Responsibility
Responsible
corporate and
social behavior
Innovative and Creative
thinkers
Redefinition of Core Values: Ethic

18. • Diversity is an extremely important
concept. It is not just about people
coming from different locations, it is Pillar Four:
a lot more; it’s learning from people Diversity and
with different cultures, background, Concept of
work and experiences, languages and
Entrepreneurship
Diversity and
age. Diversity is an added value of Entrepreneurship
which I could benefit only by being
part of a truly international and
diverse community, such the IE Corporate and Social
master class and IE Alumni network.
Responsibility
• Entrepreneurship skills are
based on team building,
open student minds, active
approach to things and
encouragement of risk Innovative and Creative
taking: this is what I wish to
learn and improve at IE.
thinkers
Redefinition of Core Values: Ethic

19. • Although politicians and central bankers mainly control the
destiny of the world economy, everybody can and should
contribute to reshaping the financial service industry and the
world economy with it. Hopefully then, the same sector that
started the deep crisis we are all facing, might eventually be
the one that will head the recovery.
• In particular, there are immense opportunities for the EU.
Europe can get out of this tough situation stronger than ever;
more integrated and compact, with a common view and
direction building up on its “diversity” feature. For this
purpose, there is a need of creative and astute thinkers, with
eradicated ethical principles and a sufficient spirit of
entrepreneurship.

20. • IE Professor Francisco López Lubián reports in one of its latest articles an old famous
but very relevant citation made by a former US president;
“Ronald Reagan in 1980 said when he was running against Jimmy Carter for
president: A recession is when your neighborough loses his job. A depression is when
you lose yours. And recovery is when Jimmy Carter loses his. It may be necessary for
many ‘Carters’ to lose their jobs before the things start to get back to normal.”
• This words are actually very true and they basically reflects part of what I tried to
convey in the previous slides.
• I am confident that if everybody does its “bit”, as outlined
in the preceding slides, in few years time, the world
economy, and even the financial service industry, could
experience a solid recovery.
• Actions already taken by the ECB to restore confidence in
the economy, reforms in the US and some developing
countries (BRICS), are all signs of hope.
• These actions, combined with more emphasis placed on
the development of strong core values in individuals, will
clearly help to reshape the financial sector, including
Investment Management, and more in general the world
economy.