This segregation prevented senior managers from developing an enterprise-wide perspective on risks to the whole entity. It meant that managers were not fully aware of the extent to which the risks of the different activities undertaken by the firm could, first, become correlated in times of stress and, second, result in high concentrations of risk exposures.
Europe is lagging behind in balance sheet reform after the crisis, compared with the United States, and in my view lending to the real economy will only return to the levels at which we want to see it if we have clean bank balance sheets.