The management of French banks. The construction of empirical methods of management information systems, risks, and organizations (1800-1984)
Hubert Bonin, professor of economic history at the Institut d'Etudes Politiques de Bordeaux and the UMR-GRETH University Montesquieu Bordeaux 4 [www.hubertbonin.com]
CHAPTER TO BE PUBLISHED IN: Eric Godelier (et al, DIR.) ENCYCLOPEDIA OF THOUGHT AND FRENCH managerial practices, nineteenth and twentieth centuries.
A study also calls for tighter focus the analysis on a half-dozen key themes without complete and without depth, with the aim of understanding the links between everyday Banking on the one hand, the organization of firm depending on the size of establishments and the business portfolio strategy on the other hand, to determine the nature of the portfolio of skills specific to the banking industry.1. Manage a portfolio of strategic business and branding
The configuration of the banking business first determines its evolution, its nature, its "corporate culture": the contours of the portfolio management of strategic activities is, as in any firm, unconsciously or so more and more "formalized" in the "strategic management" and thoughts of the community of interest posed by institutions (sometimes in the Bankers' Union and the Professional Association of Banks and finally the French Banking Association), one of the key issues.
Parisian family homes remained faithful to their historical strategy: investment banking and corporate advisory, trade finance and wholesale international banking asset management and securities brokerage for institutional investors (insurance companies, etc. .) managing a portfolio of investments and investments in companies "friends" and their attempts to diversify in the years 1960-1980, were often failures. Those that have stood the test of time have had to reinvent a "brand" based on financial innovation, the sharpness of the board of investment bankers, the art of senior bankers to develop the "financing project "or climbing structures and development or capital venture capital. The local and regional banks have held out for two half-centuries by leveraging their brand of "retail banking" antiparisienne and their nuclei loyal clientele, by prospecting the middle classes for the financial brokerage, and often becoming mini-network banks at the departmental level or multidepartmental. Their inadequate risk division, their difficulties refinancing and strong competition from the Parisian establishments have gradually weakened: they were swept by the various recessions or, more often they were acquired by regional banks, themselves usually then integrated into the Confederation of CIC and BUP (and Crédit du Nord), or, more rarely, in Paris.
The major banks have struggled to define their strategic direction, because all were influenced by the "economic model" universal banking Saint-Simon advocated by the Credit Mobilier Pereire brothers and Societe Generale de Belgique. After various internal crises or even crashes in the years 1860-1890, a model relevant policy was followed, marked by a specialization between commercial banks, merchant banks (Paribas, BUP) and ultramarine bank (Bank of Indochina Land Bank of Algeria & Tunisia, etc.).. They feature a "capital of trust", a brand (with logos from the 1950s) and a positive brand image and sustainable stability, liquidity, counterparty refinancing easy, branched network correspondent banks, as the platform of exchange (FOREX) in Paris and London, etc.).. The nationalization of the "four old" in 1946 has consolidated this position even more, before the merger of the PSC and BNCI in the National Bank of Paris in 1966, the emergence of mutual banks (Credit Agricole or "Green Bank" Banques Populaires, the major federations of credit unions) and the revival of Savings Banks (logo of the squirrel), all become commercial banks from the 1970s, are designed to consolidate the Paris and some great places in regional European competition as part of a strategy defined by both governments.
The competition between the ten largest banks, as part of the revolution's strategic banking and mass of the "retail", paving the way for "supermarket banking", with the proliferation of agencies in as many shops " bank relationship "with customers (advisory bank, investment shares and stock market portfolios of life insurance, consumer credit and housing, credit card). The "trade policy" taking shape, with customer relationship management (advisor "dedicated" overseeing a portfolio of twenty to two hundred customers), the creation of a marketing department, advertising in newspapers and posters, before broadcasting, the management of corporate identity and brand identity, leverage of "market differentiation".
Acceleration occurs when banks are mobilized to assist firms in "crisis" and intensify the "banking" in the 1980s - and the staffs banking: the banking laws of 1966-1968 and 1984 intensified more progress towards the "universal banking" and the function of banking intermediation in the "transformation" of money. But this requires a capital of skills suited to the diversification of business portfolio strategy, its construction is characterized by uneven rhythms and by failures of management (Credit Lyonnais, Credit Foncier, Natixis, etc..), Particularly in the analysis and the distribution of risks, uncertainties where during the years 1990-2000.
2. Manage deadlines and bank liquidity
Regardless of the systems and business models, the immediate concern of any responsible bank assuming its intermediation function on the money markets - the "product" processed by the banking business - is to "timelines" abound lines of credit outstanding, feeding currents deposit withdrawals, repay interbank loans, provide customers with the amount of bond issues made recently fed outflows generated by the trade in bills of exchange and commercial paper. It must ensure that "the box" is filled with liquid, otherwise face a "liquidity crisis". Or any delay, hesitation, would suggest to stakeholders (Instead, other bankers, customers) that the lack availability and the bank is "short" in liquid assets, which could cause a danger of "rumors" and crisis of confidence, which would create a real liquidity crisis (run on deposits, interbank loans stop). Thus, the governor of Land Bank was informed in late morning one day in 1993, his house no longer had to refinance the square and there was more cash, which would have pushed the edge of bankruptcy if the state apparatus had not come to the rescue. Any bank, large or small, or family limited liability company, to manage the balance between its outputs and its immediate availability and provided cash, anticipating its deadlines. Keeping daily accounts - as part of a larger form consisting of "dashboards" evaluating "the situation weekly" bank, Credit Lyonnais, as in the 1870s - the creation of calendar files for filing deadlines according to their date of completion, record keeping requirements for each branch, with weekly circulation of agencies available surplus to loss-making branches, sending cash to the branches overseas in sufficient upstream needs - across the respective growth of firm organizations, small offices and homes in Upper Bank accounting services specialized banks from the years 1880-1900 - are all ways of managing this balance liquidity, must ensure that the summit be held centralized accounting, closer to the pace of business at each place.
Ensure liquidity becomes the priority when a "narrow corridor cash" is announced and that deadlines are tied to heavy smoke. The bank "tighten" its debts as assets, accelerate repayment of the overdraft, not renew or lowers the amount of outstanding just due. It brings in cash from its network, in an emergency. It negotiates most of the lines of refinancing its "banking correspondents" on various global and European markets when it comes to replenish its coffers at the international level (eg for output in foreign currency) or, for a provincial bank, with its correspondents in Paris - since many places are regional (up to years 1930-1950) fueled by investment banks or the High Bank, happy to find jobs in the short term and paying for their availability. Finally, each house of local or regional bank and each branch manager will ask the branch manager of the Bank of France, itself linked to the direction of the discount on Paris to obtain permission to rediscount accelerated a package of promissory notes, commercial paper or bills of exchange, even with lower quality or longer maturities than usual (but with a higher interest rate to compensate for that risk). The bank runs banks in fact a discrete function of lender réescompteur emergency, in an informal and flexible, next to last resort, through each "crisette" experienced by a particular institution to help, if is worth it, to cross its cash-flow. This implies an art of negotiation, mobilization of accounts more or less transparent, more information on the "from" commercial paper, etc..
It is clear, finally, that if the cash flow problems persist and worsen, they slip on liquidity risk and credit risk that snaps when the debate about the function of lender of last resort of the bank Central, which could intervene to bail out a bank when the spell ("systemic") of a regional or even place the Paris is at stake: the negotiations are difficult because it is not to threaten a split the treasury of the Bank of France to provide cash to a particular institution: decision-guarantee on the quality of management (sometimes with change of management team, imposition of new methods of risk management, policy tightening credit) and the assets used are discussed, and each acute recession was marked by such interventions (such as to save the Paris in 1848 or 1931-1935). The central bank can not save all banks, the "law of chance" to play for not believing in any bank it may take unnecessary risks, jeopardizing its liquidity and refinancing needed win, however, where the elimination of recurring crises over the banks or, occasionally, the assembly of pools rescue the Bank of France, sometimes the Treasury, banks often engaged in "the solidarity of place," working together to provide the cash essential to a bank, it is then converted its balance sheet after removal of questionable (Comptoir National Discount Paris in 1889, National Bank for Trade and Industry in 1932) or merged with other banks (as in 1932 for several banks taken over by the CIC group and recently as the Credit Lyonnais, taken over by Crédit Agricole).
Not to use these methods for heavy intervention by the central bank or its heavy controls (through "coefficients cash" after 1945), it is conceivable that banks are refinanced over each other without necessarily resorting to rigid procedures of discounting (three signatures required on each end shown) or wait until the "last resort". Also the Anglo-Saxon model (open market) of the "money market and interbank" Is outlined in the second half of the 1930s, and after a period of "directed credit" by the public, established in the 1970s . Each bank adds its rooms London and Paris exchange room of the interbank market, and these are all nuclei of the "front office" which is introduced in the mid-1980s, moving towards the business' bank markets and arbitration "in houses or within specialized groups.
3. Face asymmetric information in risk management
To avoid liquidity crises and solvency, the bank must struggle to collect information enabling it to anticipate the emergence of risks to its assets, or upstream of risk taking, or to halt the deterioration of its risks. In addition to the function of market intermediation of money, it assumes a function of market intervention information. High Bank homes are at the heart of a network of correspondence by mail with their "correspondents" (correspondent banking) that provide both operations (discount bills of exchange or credit, etc.). And benefits of information on specific trading house, shipping weapons or bank. "The Table" brings the mail every day so that strip managers and discuss this letter to help weigh the risks. Homes or local bank branch managers of major bank attending places of sociability employers (associations, clubs, meals, hunting, etc..) Easier to evaluate the personality of their clients present or future, because "retail banking "(embeddedness) mobilizes" personal credit ", the reputation of the client, its potential for honesty and, above all, stability, to prevent patrons intoxicated by growth, carried by the overstocking and over-indebtedness - largely because, until 'at the turn of the 1950s, no systematic review is available, before the Bank of France implement the Central Balance Sheet. We must collect data on stock status of the client, the intensity and pace of its materials flow or goods in the warehouses of the port or place, trying to glean information about its order book, watch his Finally, morals, because business owners are ruined by the vices (gambling, etc.). or excessive lifestyle and tap into the coffers of the company. Finally, the branch manager of the Bank of France, surrounded by its discount committee consisting of some notable place, attempts to detect whether a particular bank is not too "easy", that is, that tried to bet on the continuity of the cyclical boom and extend its lines over-discovered.
From the years 1880-1900, large banks, the victims of setbacks in their youth, set out to build a practice of "real credit." They equip themselves with a research department, full of records by client company and sector, and hire engineers and experts to weigh for ex ante risk and ex post evaluation of results of operations. While the financial affairs are first priority (such company will she break his debt in case of issuance of bonds and provide the dividend, if share issue?). But business credit records have also provided. Managers of commercial bank trying to follow the movement of discount of each customer, by combining data on flows of commercial paper (in the service of the Portfolio), the deadlines, the sectoral distribution (and thus diversification of the customer's customer). Dorizon Louis, Director General of the Society in the years 1890-1910, and is the creator of a large discount department that handles both "commercial paper" and performs a function of risk analysis. For this, we must centralize the processing of paper discount all agencies and headquarters, to keep records by customer, and if possible to develop early warning mechanisms, which allow management to react quickly to stop deterioration of the risk, reducing the weight of the house in the informal pools of loans - the skill is precisely to try to let the brothers take up the risk ...
After the Second World War, the formalization of pools interbank lending and the use of the CBSO require a joint management of the evolution of credit lines, at best "interest of space." Now, bankers are also using data from export credit agencies (COFACE internationally, SFAC in France, useful for larger SMEs), the National Credit (who refinance their loan files in the medium term) and the Bank of French Foreign Trade (same for import-export loans). The danger lies in the internationalization of corporate clients (in particular through the "buyer credit" from the mid-1960s, provided by firms to their foreign customers through loans originated locally), and need to mobilize networks of correspondent banks in foreign places, better scan the stocks and flows of "documentary credits", which provide much information on the import and export customers in the short term, hence the role of large branches port , featuring teams of specialists. Specialized units at Headquarters and in some places (Geneva, London, Hong Kong, etc..) Attempt to disentangle the extent of the risks taken by customers in the market of international trade of commodities, materials and energy sources, related to foreign exchange and credit sea.
The key issue, through half-centuries, is still the balance of the customer. For a long time supporter of the banker personal credit only gets a few bits of a customer accounting, often also unable to provide a strong balance sheet, or it simply balances built by artificial patterns (as André Citroën in between the two wars, which, he said, had three assessments, one for himself, one for the IRS, one for the bankers) can make the most of the competition between banks. The implementation of the "accounting" from years 1940-1950, the constraints imposed on its rediscount by a Banque de France has become "bank of banks" and manager of the CBSO, and the rise of firms accounting and auditing accounting facilitate a more realistic perception of the statement of accounts of the borrower, which should eliminate the information asymmetry. But the syndrome of "black hole" - the sudden fall of a company buried its indebtedness - is recurrent, especially during the Great Depression of the productive system for years 1975-1995 - as no bank can hold a sharp turnaround of orders discern a customer's behavior or accounting fraud at the national or, more commonly, at the provincial level: many regional banks (CIC group or Crédit du Nord) or bank branches have Paris been shaken by the collapse of the house of cards the local productive system and SMEs that animated, resulting in prolonged efforts to replenish the customer base and correct the earnings power after the nationalization of 1982 and again after privatization from 1986-1998.
4. Keep reliable accounting
Accounting accuracy becomes an issue sensitive to over manual methods and management "wet finger" - even if the capacity of banker's intuition vis-à-vis a file is sometimes a good tool. Male employees levels of the Great Books of account at Headquarters or books in the agencies are overwhelmed at the turn of the twentieth century, despite the structure of accounting squat (General Ledger, accounting agencies, etc.).. We must support them by a massive hiring of women in the clerical assistants, but the expansion of these strata and the strikes of the early 1920s (leading to their establishment) account for the convergence of technical progress. "Factories tertiary" to employees who enter the data (within the Portfolio: timing, receipt, within the general ledger, in each division sector) are installed around electrical machinery accounting for recording the encrypted data on maps perforated and, according to hierarchical levels in becoming the "banking organization" at the same time, before or after, enter or obtain data printed on sheets, for clients, the records of agencies or departments at Headquarters , and General Ledger. The carbon sheets are used for a multicopy, punched cards to facilitate multiprocessing based on the needs of each service, machine, manufactured in the United States, England, and increasingly in France, through the dissemination of a "business model" electronic book developed across the Atlantic and Germany and refined in European Banking Congress. This movement extends from the mid-1920s to the mid-1950s, according to the investment capacity of each bank in equipment and housing and adapted in the light of the banking crisis and the war.
The management information is available at the turn of the 1960s, and streamlined accounting methods converge to structure a process of computerization of the processing of bank data: plants capture and processing, and only treatment (after the agencies Headquarters and services have been provided with equipment suitable for input on punched tapes) are established in each major bank. Then the outsourcing contracts and especially the revolution of computer and digital connections are changing the nature of the accounting functions: instantaneous access to information for managers of agency accounts and portfolios, simulation projects 'banking, and, as with any firm, analysis of resource allocation and development of quarterly accounts, but also own the bank, construction of grids of risk assessment, asset allocation based on passive , determination of the counterparties and the risks they create, etc.. - Before the introduction of internationalized accounting standards under the Basel I and II at the turn of the 2000s. Although each is equipped with management tools sharpened, each bank takes its own political risk, depending on the degree of "profit maximization" (risk appetite) defined by management ("income on capital employed"), and "differentiation" can be observed during each major crisis (1987, 1993-1995, 2001-2002, since 2007) through the proportion of income to be assigned to losses and provisions.
5. Adapting staff management to an organization of firm
If houses in Upper Bank, become banks (investment banks) banks or wealth management (private banking), both historical (Rothschild, Lazard) or "shops" set up at the turn of the twenty-first century, remain profile team (partners, senior managers, executives pool of high-flying) reagent, other houses were from the years 1880-1920 for the major commercial banks, and the years 1960-1980 for banks oriented mutual and philanthropy, corporations have gradually acclimated an "organization of firm".
For management staff, they have adopted specific pathways of recruitment and training, drawing more and more among engineers (design, organizational management, financial engineering) and in the major body of the state, especially among the Inspectorate of Finance, rich in talent to configure the supervision of "general banking" and networks of influence within the economic system of state leaders from corporate clients. Internal channels have also flourished, when the "professionalization" of the banking industry has increased in the twentieth century. The Inspector General has become a "school" learning for overseeing the management process and provided many senior executives, including the network (branch managers, headquarters, international network). Internal promotion competitions have emerged in the years 1920-1930 (Societe Generale) to train middle and senior management.
At the option of crises experienced during recessions (and loss of revelation lies in the keeping and portfolio management of clients), it was necessary to build "systems" to fight against fraud. The Inspectorate has been the key lever, for his "shot" examination of cash books and accounts. But it was mainly fed "codes of procedures" (well, the Company generally, the Principles of banking and general instructions for use of staff from 1920, full of 160 pages) to streamline and unify the process operations and facilitate their control. Much later, from the years 1970-1980, computerization has led throughout as control methods and monthly management reports on specific ratios and frequent, to track deviations from the mean (to encourage controls ) and to evaluate the performance of managers (to power the circuits of promotion).
Basically, the recruitment of male staff, and also female, were taken at random from the growth in enrollment, sometimes by encouraging recruitment "dynastic" over several generations, and especially the mechanism of "recommendations". It was stable and reliable staff (in place of "scriptures" and the relationship with the client), both at Headquarters and in large agencies (between one and two hundred people in some places). One staff trained or unskilled counters and headquarters departments (with its own hierarchy of employees and senior employees, with a slow promotion) was supplemented by a mass of "boys" messengers responsible for circulating e inside the bank or the place, and collectors for the delivery of commercial paper. Then completed the recruitment huge "factories tertiary" electronic computer for accounting and data processing. At each step, a philanthropic social policy (Christian Social and willing to fix the labor force) has long been led to employee benefits (pension, holiday centers, etc.). And especially the negotiation of its own statutes each bank to crystallize hierarchical levels, very heavy in organizations copied from the Administration of Finance.
After the Second World War, a "normalization" of social policy took shape as everywhere: the collective agreement of 1952, negotiated and discounted at the national level by the Professional Association of Banks, has forty years set the joint hierarchies, any gateways internal promotion, guarantees on working conditions and wages. Negotiated management of human resources was driven by the structuring of a specialized in a bank where the workforce is not only a control variable "overhead" or reduction of "coefficient of banking operations," but a federation of ponds suitable for each sector of business, while the training center of the banking industry (established in 1971 in the wake of the professional union for the development of technical education bank created in the 1920s, and the Center for Technical Education and bank) expands its range of continuing education. A rather strong union unfolds, banal, or marked by the SNB (National Union of Bank) and a good presence of the GSC-Confederation of Professional among middle and senior management.
Hubert Bonin, professor of economic history at the Institut d'Etudes Politiques de Bordeaux and the UMR-GRETH University Montesquieu Bordeaux 4 [www.hubertbonin.com]
CHAPTER TO BE PUBLISHED IN: Eric Godelier (et al, DIR.) ENCYCLOPEDIA OF THOUGHT AND FRENCH managerial practices, nineteenth and twentieth centuries.
A study also calls for tighter focus the analysis on a half-dozen key themes without complete and without depth, with the aim of understanding the links between everyday Banking on the one hand, the organization of firm depending on the size of establishments and the business portfolio strategy on the other hand, to determine the nature of the portfolio of skills specific to the banking industry.1. Manage a portfolio of strategic business and branding
The configuration of the banking business first determines its evolution, its nature, its "corporate culture": the contours of the portfolio management of strategic activities is, as in any firm, unconsciously or so more and more "formalized" in the "strategic management" and thoughts of the community of interest posed by institutions (sometimes in the Bankers' Union and the Professional Association of Banks and finally the French Banking Association), one of the key issues.
Parisian family homes remained faithful to their historical strategy: investment banking and corporate advisory, trade finance and wholesale international banking asset management and securities brokerage for institutional investors (insurance companies, etc. .) managing a portfolio of investments and investments in companies "friends" and their attempts to diversify in the years 1960-1980, were often failures. Those that have stood the test of time have had to reinvent a "brand" based on financial innovation, the sharpness of the board of investment bankers, the art of senior bankers to develop the "financing project "or climbing structures and development or capital venture capital. The local and regional banks have held out for two half-centuries by leveraging their brand of "retail banking" antiparisienne and their nuclei loyal clientele, by prospecting the middle classes for the financial brokerage, and often becoming mini-network banks at the departmental level or multidepartmental. Their inadequate risk division, their difficulties refinancing and strong competition from the Parisian establishments have gradually weakened: they were swept by the various recessions or, more often they were acquired by regional banks, themselves usually then integrated into the Confederation of CIC and BUP (and Crédit du Nord), or, more rarely, in Paris.
The major banks have struggled to define their strategic direction, because all were influenced by the "economic model" universal banking Saint-Simon advocated by the Credit Mobilier Pereire brothers and Societe Generale de Belgique. After various internal crises or even crashes in the years 1860-1890, a model relevant policy was followed, marked by a specialization between commercial banks, merchant banks (Paribas, BUP) and ultramarine bank (Bank of Indochina Land Bank of Algeria & Tunisia, etc.).. They feature a "capital of trust", a brand (with logos from the 1950s) and a positive brand image and sustainable stability, liquidity, counterparty refinancing easy, branched network correspondent banks, as the platform of exchange (FOREX) in Paris and London, etc.).. The nationalization of the "four old" in 1946 has consolidated this position even more, before the merger of the PSC and BNCI in the National Bank of Paris in 1966, the emergence of mutual banks (Credit Agricole or "Green Bank" Banques Populaires, the major federations of credit unions) and the revival of Savings Banks (logo of the squirrel), all become commercial banks from the 1970s, are designed to consolidate the Paris and some great places in regional European competition as part of a strategy defined by both governments.
The competition between the ten largest banks, as part of the revolution's strategic banking and mass of the "retail", paving the way for "supermarket banking", with the proliferation of agencies in as many shops " bank relationship "with customers (advisory bank, investment shares and stock market portfolios of life insurance, consumer credit and housing, credit card). The "trade policy" taking shape, with customer relationship management (advisor "dedicated" overseeing a portfolio of twenty to two hundred customers), the creation of a marketing department, advertising in newspapers and posters, before broadcasting, the management of corporate identity and brand identity, leverage of "market differentiation".
Acceleration occurs when banks are mobilized to assist firms in "crisis" and intensify the "banking" in the 1980s - and the staffs banking: the banking laws of 1966-1968 and 1984 intensified more progress towards the "universal banking" and the function of banking intermediation in the "transformation" of money. But this requires a capital of skills suited to the diversification of business portfolio strategy, its construction is characterized by uneven rhythms and by failures of management (Credit Lyonnais, Credit Foncier, Natixis, etc..), Particularly in the analysis and the distribution of risks, uncertainties where during the years 1990-2000.
2. Manage deadlines and bank liquidity
Regardless of the systems and business models, the immediate concern of any responsible bank assuming its intermediation function on the money markets - the "product" processed by the banking business - is to "timelines" abound lines of credit outstanding, feeding currents deposit withdrawals, repay interbank loans, provide customers with the amount of bond issues made recently fed outflows generated by the trade in bills of exchange and commercial paper. It must ensure that "the box" is filled with liquid, otherwise face a "liquidity crisis". Or any delay, hesitation, would suggest to stakeholders (Instead, other bankers, customers) that the lack availability and the bank is "short" in liquid assets, which could cause a danger of "rumors" and crisis of confidence, which would create a real liquidity crisis (run on deposits, interbank loans stop). Thus, the governor of Land Bank was informed in late morning one day in 1993, his house no longer had to refinance the square and there was more cash, which would have pushed the edge of bankruptcy if the state apparatus had not come to the rescue. Any bank, large or small, or family limited liability company, to manage the balance between its outputs and its immediate availability and provided cash, anticipating its deadlines. Keeping daily accounts - as part of a larger form consisting of "dashboards" evaluating "the situation weekly" bank, Credit Lyonnais, as in the 1870s - the creation of calendar files for filing deadlines according to their date of completion, record keeping requirements for each branch, with weekly circulation of agencies available surplus to loss-making branches, sending cash to the branches overseas in sufficient upstream needs - across the respective growth of firm organizations, small offices and homes in Upper Bank accounting services specialized banks from the years 1880-1900 - are all ways of managing this balance liquidity, must ensure that the summit be held centralized accounting, closer to the pace of business at each place.
Ensure liquidity becomes the priority when a "narrow corridor cash" is announced and that deadlines are tied to heavy smoke. The bank "tighten" its debts as assets, accelerate repayment of the overdraft, not renew or lowers the amount of outstanding just due. It brings in cash from its network, in an emergency. It negotiates most of the lines of refinancing its "banking correspondents" on various global and European markets when it comes to replenish its coffers at the international level (eg for output in foreign currency) or, for a provincial bank, with its correspondents in Paris - since many places are regional (up to years 1930-1950) fueled by investment banks or the High Bank, happy to find jobs in the short term and paying for their availability. Finally, each house of local or regional bank and each branch manager will ask the branch manager of the Bank of France, itself linked to the direction of the discount on Paris to obtain permission to rediscount accelerated a package of promissory notes, commercial paper or bills of exchange, even with lower quality or longer maturities than usual (but with a higher interest rate to compensate for that risk). The bank runs banks in fact a discrete function of lender réescompteur emergency, in an informal and flexible, next to last resort, through each "crisette" experienced by a particular institution to help, if is worth it, to cross its cash-flow. This implies an art of negotiation, mobilization of accounts more or less transparent, more information on the "from" commercial paper, etc..
It is clear, finally, that if the cash flow problems persist and worsen, they slip on liquidity risk and credit risk that snaps when the debate about the function of lender of last resort of the bank Central, which could intervene to bail out a bank when the spell ("systemic") of a regional or even place the Paris is at stake: the negotiations are difficult because it is not to threaten a split the treasury of the Bank of France to provide cash to a particular institution: decision-guarantee on the quality of management (sometimes with change of management team, imposition of new methods of risk management, policy tightening credit) and the assets used are discussed, and each acute recession was marked by such interventions (such as to save the Paris in 1848 or 1931-1935). The central bank can not save all banks, the "law of chance" to play for not believing in any bank it may take unnecessary risks, jeopardizing its liquidity and refinancing needed win, however, where the elimination of recurring crises over the banks or, occasionally, the assembly of pools rescue the Bank of France, sometimes the Treasury, banks often engaged in "the solidarity of place," working together to provide the cash essential to a bank, it is then converted its balance sheet after removal of questionable (Comptoir National Discount Paris in 1889, National Bank for Trade and Industry in 1932) or merged with other banks (as in 1932 for several banks taken over by the CIC group and recently as the Credit Lyonnais, taken over by Crédit Agricole).
Not to use these methods for heavy intervention by the central bank or its heavy controls (through "coefficients cash" after 1945), it is conceivable that banks are refinanced over each other without necessarily resorting to rigid procedures of discounting (three signatures required on each end shown) or wait until the "last resort". Also the Anglo-Saxon model (open market) of the "money market and interbank" Is outlined in the second half of the 1930s, and after a period of "directed credit" by the public, established in the 1970s . Each bank adds its rooms London and Paris exchange room of the interbank market, and these are all nuclei of the "front office" which is introduced in the mid-1980s, moving towards the business' bank markets and arbitration "in houses or within specialized groups.
3. Face asymmetric information in risk management
To avoid liquidity crises and solvency, the bank must struggle to collect information enabling it to anticipate the emergence of risks to its assets, or upstream of risk taking, or to halt the deterioration of its risks. In addition to the function of market intermediation of money, it assumes a function of market intervention information. High Bank homes are at the heart of a network of correspondence by mail with their "correspondents" (correspondent banking) that provide both operations (discount bills of exchange or credit, etc.). And benefits of information on specific trading house, shipping weapons or bank. "The Table" brings the mail every day so that strip managers and discuss this letter to help weigh the risks. Homes or local bank branch managers of major bank attending places of sociability employers (associations, clubs, meals, hunting, etc..) Easier to evaluate the personality of their clients present or future, because "retail banking "(embeddedness) mobilizes" personal credit ", the reputation of the client, its potential for honesty and, above all, stability, to prevent patrons intoxicated by growth, carried by the overstocking and over-indebtedness - largely because, until 'at the turn of the 1950s, no systematic review is available, before the Bank of France implement the Central Balance Sheet. We must collect data on stock status of the client, the intensity and pace of its materials flow or goods in the warehouses of the port or place, trying to glean information about its order book, watch his Finally, morals, because business owners are ruined by the vices (gambling, etc.). or excessive lifestyle and tap into the coffers of the company. Finally, the branch manager of the Bank of France, surrounded by its discount committee consisting of some notable place, attempts to detect whether a particular bank is not too "easy", that is, that tried to bet on the continuity of the cyclical boom and extend its lines over-discovered.
From the years 1880-1900, large banks, the victims of setbacks in their youth, set out to build a practice of "real credit." They equip themselves with a research department, full of records by client company and sector, and hire engineers and experts to weigh for ex ante risk and ex post evaluation of results of operations. While the financial affairs are first priority (such company will she break his debt in case of issuance of bonds and provide the dividend, if share issue?). But business credit records have also provided. Managers of commercial bank trying to follow the movement of discount of each customer, by combining data on flows of commercial paper (in the service of the Portfolio), the deadlines, the sectoral distribution (and thus diversification of the customer's customer). Dorizon Louis, Director General of the Society in the years 1890-1910, and is the creator of a large discount department that handles both "commercial paper" and performs a function of risk analysis. For this, we must centralize the processing of paper discount all agencies and headquarters, to keep records by customer, and if possible to develop early warning mechanisms, which allow management to react quickly to stop deterioration of the risk, reducing the weight of the house in the informal pools of loans - the skill is precisely to try to let the brothers take up the risk ...
After the Second World War, the formalization of pools interbank lending and the use of the CBSO require a joint management of the evolution of credit lines, at best "interest of space." Now, bankers are also using data from export credit agencies (COFACE internationally, SFAC in France, useful for larger SMEs), the National Credit (who refinance their loan files in the medium term) and the Bank of French Foreign Trade (same for import-export loans). The danger lies in the internationalization of corporate clients (in particular through the "buyer credit" from the mid-1960s, provided by firms to their foreign customers through loans originated locally), and need to mobilize networks of correspondent banks in foreign places, better scan the stocks and flows of "documentary credits", which provide much information on the import and export customers in the short term, hence the role of large branches port , featuring teams of specialists. Specialized units at Headquarters and in some places (Geneva, London, Hong Kong, etc..) Attempt to disentangle the extent of the risks taken by customers in the market of international trade of commodities, materials and energy sources, related to foreign exchange and credit sea.
The key issue, through half-centuries, is still the balance of the customer. For a long time supporter of the banker personal credit only gets a few bits of a customer accounting, often also unable to provide a strong balance sheet, or it simply balances built by artificial patterns (as André Citroën in between the two wars, which, he said, had three assessments, one for himself, one for the IRS, one for the bankers) can make the most of the competition between banks. The implementation of the "accounting" from years 1940-1950, the constraints imposed on its rediscount by a Banque de France has become "bank of banks" and manager of the CBSO, and the rise of firms accounting and auditing accounting facilitate a more realistic perception of the statement of accounts of the borrower, which should eliminate the information asymmetry. But the syndrome of "black hole" - the sudden fall of a company buried its indebtedness - is recurrent, especially during the Great Depression of the productive system for years 1975-1995 - as no bank can hold a sharp turnaround of orders discern a customer's behavior or accounting fraud at the national or, more commonly, at the provincial level: many regional banks (CIC group or Crédit du Nord) or bank branches have Paris been shaken by the collapse of the house of cards the local productive system and SMEs that animated, resulting in prolonged efforts to replenish the customer base and correct the earnings power after the nationalization of 1982 and again after privatization from 1986-1998.
4. Keep reliable accounting
Accounting accuracy becomes an issue sensitive to over manual methods and management "wet finger" - even if the capacity of banker's intuition vis-à-vis a file is sometimes a good tool. Male employees levels of the Great Books of account at Headquarters or books in the agencies are overwhelmed at the turn of the twentieth century, despite the structure of accounting squat (General Ledger, accounting agencies, etc.).. We must support them by a massive hiring of women in the clerical assistants, but the expansion of these strata and the strikes of the early 1920s (leading to their establishment) account for the convergence of technical progress. "Factories tertiary" to employees who enter the data (within the Portfolio: timing, receipt, within the general ledger, in each division sector) are installed around electrical machinery accounting for recording the encrypted data on maps perforated and, according to hierarchical levels in becoming the "banking organization" at the same time, before or after, enter or obtain data printed on sheets, for clients, the records of agencies or departments at Headquarters , and General Ledger. The carbon sheets are used for a multicopy, punched cards to facilitate multiprocessing based on the needs of each service, machine, manufactured in the United States, England, and increasingly in France, through the dissemination of a "business model" electronic book developed across the Atlantic and Germany and refined in European Banking Congress. This movement extends from the mid-1920s to the mid-1950s, according to the investment capacity of each bank in equipment and housing and adapted in the light of the banking crisis and the war.
The management information is available at the turn of the 1960s, and streamlined accounting methods converge to structure a process of computerization of the processing of bank data: plants capture and processing, and only treatment (after the agencies Headquarters and services have been provided with equipment suitable for input on punched tapes) are established in each major bank. Then the outsourcing contracts and especially the revolution of computer and digital connections are changing the nature of the accounting functions: instantaneous access to information for managers of agency accounts and portfolios, simulation projects 'banking, and, as with any firm, analysis of resource allocation and development of quarterly accounts, but also own the bank, construction of grids of risk assessment, asset allocation based on passive , determination of the counterparties and the risks they create, etc.. - Before the introduction of internationalized accounting standards under the Basel I and II at the turn of the 2000s. Although each is equipped with management tools sharpened, each bank takes its own political risk, depending on the degree of "profit maximization" (risk appetite) defined by management ("income on capital employed"), and "differentiation" can be observed during each major crisis (1987, 1993-1995, 2001-2002, since 2007) through the proportion of income to be assigned to losses and provisions.
5. Adapting staff management to an organization of firm
If houses in Upper Bank, become banks (investment banks) banks or wealth management (private banking), both historical (Rothschild, Lazard) or "shops" set up at the turn of the twenty-first century, remain profile team (partners, senior managers, executives pool of high-flying) reagent, other houses were from the years 1880-1920 for the major commercial banks, and the years 1960-1980 for banks oriented mutual and philanthropy, corporations have gradually acclimated an "organization of firm".
For management staff, they have adopted specific pathways of recruitment and training, drawing more and more among engineers (design, organizational management, financial engineering) and in the major body of the state, especially among the Inspectorate of Finance, rich in talent to configure the supervision of "general banking" and networks of influence within the economic system of state leaders from corporate clients. Internal channels have also flourished, when the "professionalization" of the banking industry has increased in the twentieth century. The Inspector General has become a "school" learning for overseeing the management process and provided many senior executives, including the network (branch managers, headquarters, international network). Internal promotion competitions have emerged in the years 1920-1930 (Societe Generale) to train middle and senior management.
At the option of crises experienced during recessions (and loss of revelation lies in the keeping and portfolio management of clients), it was necessary to build "systems" to fight against fraud. The Inspectorate has been the key lever, for his "shot" examination of cash books and accounts. But it was mainly fed "codes of procedures" (well, the Company generally, the Principles of banking and general instructions for use of staff from 1920, full of 160 pages) to streamline and unify the process operations and facilitate their control. Much later, from the years 1970-1980, computerization has led throughout as control methods and monthly management reports on specific ratios and frequent, to track deviations from the mean (to encourage controls ) and to evaluate the performance of managers (to power the circuits of promotion).
Basically, the recruitment of male staff, and also female, were taken at random from the growth in enrollment, sometimes by encouraging recruitment "dynastic" over several generations, and especially the mechanism of "recommendations". It was stable and reliable staff (in place of "scriptures" and the relationship with the client), both at Headquarters and in large agencies (between one and two hundred people in some places). One staff trained or unskilled counters and headquarters departments (with its own hierarchy of employees and senior employees, with a slow promotion) was supplemented by a mass of "boys" messengers responsible for circulating e inside the bank or the place, and collectors for the delivery of commercial paper. Then completed the recruitment huge "factories tertiary" electronic computer for accounting and data processing. At each step, a philanthropic social policy (Christian Social and willing to fix the labor force) has long been led to employee benefits (pension, holiday centers, etc.). And especially the negotiation of its own statutes each bank to crystallize hierarchical levels, very heavy in organizations copied from the Administration of Finance.
After the Second World War, a "normalization" of social policy took shape as everywhere: the collective agreement of 1952, negotiated and discounted at the national level by the Professional Association of Banks, has forty years set the joint hierarchies, any gateways internal promotion, guarantees on working conditions and wages. Negotiated management of human resources was driven by the structuring of a specialized in a bank where the workforce is not only a control variable "overhead" or reduction of "coefficient of banking operations," but a federation of ponds suitable for each sector of business, while the training center of the banking industry (established in 1971 in the wake of the professional union for the development of technical education bank created in the 1920s, and the Center for Technical Education and bank) expands its range of continuing education. A rather strong union unfolds, banal, or marked by the SNB (National Union of Bank) and a good presence of the GSC-Confederation of Professional among middle and senior management.
Aucun commentaire:
Enregistrer un commentaire