The increased complexity of financial
products and markets poses greater challenges to our understanding
of what has been happening to the leasing industry over recent

So what is the likelihood of bankers and regulators keeping pace
with what has been happening, and the evolving risks to markets and

Banks, the parents of much of the leasing industry, are now
facing fatigue with the storm of regulation and compliance
initiatives that are now being suggested.

An obvious response is to view regulatory requirements as a cost
burden on the business.

An alternative response, however, is to use them as a lever for
change and to adopt a business benefit in parallel to achieving
regulatory compliance. They could create an opportunity for a
‘spring-clean’ and even a sunny future for firms that grasp the
opportunities they present.

Hopefully the future will bring less enthusiasm for the
esoteric, and more for the old fashioned asset finance products.
After all, the real world does not benefit from the securitisation
and packaged structures seen in recent times anywhere near as much
as from the financing of production equipment and

Leasing companies are in the business of making money, and may
well be seen more in this light by their parent organisations in
the future. When the present problems have died down, I hope the
bankers do not return to their so-called ‘creative’ mode. The scene
will be set for the tried and tested ‘asset financiers’ to get on
with the job started nearly 50 years ago.

The bottom line is that senior decision makers in the banking
industry need to step back from the new compliance issues which
they will undoubtedly have to deal with in the coming months, and
consider the economic value that is being generated.

Derek Soper

The author is chairman of The Alta Group, ‘Advisors to the
Asset Finance Industry’