Prolonged pessimism in the market
A survey of over 1600 senior European corporates, treasurers and bankers at EuroFinance's International Cash and treasury Management conference in Copenhagen, 21-23 October 2009, revealed a prolonged pessimistic view of the market.
Of major significance was the belief that banks are using the current financial crisis to unfairly set higher prices. Unsurprisingly, 84% of bankers maintain that this is not the case. Similarly, there was a clear divide between the two surrounding the topic of whether or not the G20 should be concerned by bankers’ bonuses. The results did however show a consensus among corporates and bankers that they expect more bad news to follow in 2010.
The main findings of the survey were:
• 57% believe that banks are using the crisis to unfairly set high prices
• 71% believe more bad news is likely to follow
• 58% believe the G20 should be concerned about bankers’ bonuses
• 64% are bullish when looking towards 2010.
EuroFinance’s 18th International Cash and Treasury Management Conference, kicked off on the 21 October 2009 with a survey before hosting a comprehensive programme of plenary sessions and streams. Topics discussed included liquidity, fair value accounting and eliminating settlement risk. EuroFinance also launched their own ‘Financial Fairytales’ at the conference – a collection of short stories that use the financial crisis to re-interpret the classical fairytales of Hans Christian Andersen.
The survey also revealed the top three concerns among attendees when looking towards 2010. Out of a list of seven choices, a quarter voted counterparty risk as their major concern, followed closely by the availability and cost of credit with 22%. Forecasting cash flow and the state of the economy were joint third, with 18% of the vote.
Carolyn Meier, managing director, EuroFinance, commented, “Over 1600 people have joined us in Copenhagen this year, which suggests an urgent need to share thoughts and ideas, and to tackle the financial crisis head on. This crisis has been particularly far-reaching and overwhelming, with its effects having been felt not only by investment grade companies, but also among highly rated household names. For banks, the crisis is nearly over, but for many corporates it’s just starting. Some firms are becoming more flexible and are beginning to allow people to delay their payments, as illustrated by the survey which reveals that a quarter of respondents are collecting invoices later than usual. However, for many other companies, the situation is very different with some finding orders being cancelled and in certain circumstances, suppliers going under.”
EuroFinance annually surveys the treasury and CFO community at this flagship event, which in 2010 will be held in Geneva. Delegates responded to a series of questions regarding the impact of the current credit crisis and cast their votes using an electronic voting system.
LONDON, 26th October 2009
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