Since 1990, 65%+ of FDIC-insured depositories have disappeared. Many of these institutions lost their independence because they accidentally misallocated capital to poor risk/rewards on both sides of the balance sheet. During this session, Matt Forgotson, an award-winning equity research analyst and industry thought leader, will argue that many of these institutions may have been victims of the problem that has long plagued the banking industry, namely a reliance on faulty frameworks and single-scenario snapshot metrics. Against this backdrop, the most recent banking crisis and years of constrained NIMs, ROAs, and ROEs that followed in its wake are simply the most recent manifestation of this persistent, pervasive, and powerful problem. Once the problem is defined, Matt will then propose a remedy: a comprehensive, objective process and framework that empowers managers to make prospective capital allocation decisions with clarity and confidence. Those willing to embrace a more complete analytical view can help protect and potentially even accelerate their missions. 

Learning Outcomes:

• Understand that bank balance sheets are loaded with unlike cash flows. Bankers must choose among these unlike things in rapidly evolving markets. 
• Appreciate that conventional methods, tools, and metrics are accurate but incomplete. Incomplete evaluation oftentimes leads bankers to seek risk when their objective is to mitigate it. 
• Demonstrate that current challenges – ranging from constrained profitability to succession planning – all trace back to capital allocation. 
• Introduce the Capital Level Playing Field® & the concept of asymmetric returns. 
• Evaluate prospective risk and regulatory positions