Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Survey of Financial Institutions on Credit Crisis

Survey of Financial Institutions on Credit Crisis

LONDON, Oct. 10 /PRNewswire-AsiaNet/ --

The global financial crisis will lead to radical changes in the structure of the financial services industry with more financial institutions set to fail, according to a survey of financial institutions by international legal practice Norton Rose Group.

The survey of 195 respondents (comprised of financial institutions and other mainstream corporate entities) from 16 - 25 September 2008 canvasses the views of financial services professionals on the latest phase of the credit crunch.

Respondents believe that the crisis will deepen with 79% expecting more financial institutions to fail, 85% predicting increased regulation, 91% increased consolidation, and 38% expecting more state ownership of businesses in the sector.

Respondents revealed that the crisis has had a marked impact on corporate behaviour, as financial institutions have become more conservative in their approach to risk management (according to 75%), to credit approval processes (70%), and to due diligence (47%). They were also keener to recover losses and as a result would consider becoming involved in commercial disputes (according to 35%), especially in complex areas such as structured finance and derivatives.

Surprisingly 64% of respondents indicated that their institution hasn't introduced changes to employees' bonus structures.

Stephen Parish, Global Head of Banking, Norton Rose LLP commented:

"The credit crunch has entered a dramatic new phase. What started as a liquidity problem arising from write-downs of mortgage-backed securities has been transformed, into a much more serious financial problem. Intensive efforts are being made to rescue and reform financial institutions; many are questioning the viability of their business models."

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

Many respondents (47%) were actively pursuing opportunities in new markets, especially in emerging economies (36% mentioned India, 47% the Middle East and 33% China) but also in Western Europe (31%) and in North America (23%).

75% of respondents believe the effects of the credit crisis will take between 1 and five years to dissipate, whereas 17% believe they will take over 5 years or will remain permanent.

James Bateson, Head of Financial Institutions, Norton Rose LLP commented:

"Some economists believe that growth in emerging markets could offset the slowdown in the West, and investors from Asia and the Middle East are increasingly making strategic acquisitions of Western assets. Whatever course events take, the next few months will be challenging and unpredictable."


ENDS

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.