Contributor: David Hamilton

In my previous two blogs, I have referenced SunGard’s Well Managed Money research. In this research SunGard identified four main stakeholder groups which will influence the future of well managed money. Today I want to talk about the third stakeholder group; Investors. As investors and bankers, we have long known about the natural friction between shareholders and bondholders, the former seeking higher levels of return typically associated with increased risk and the latter seeking to avoid tail-risk and in so doing, protecting their fixed returns. A central pillar to most, if not all, bank strategy is the goal of maximizing shareholder value. However, maximizing value for one investor group often conflicts with the interests of one or more other groups. These externalities tend to be at their greatest during times of financial distress, particularly if the financial system is facing the collapse of major financial institutions which could basically drag various investor groups into abject misery.... read more