Financial Risk Outlook 2009

Every city and village in Europe, and with them politicians and managers, will be confronted with the financial crisis by the way policies and projects can and will be forecasted and budgetted. The flooding of the risk crisis is not yet over. The water level is still high. And when the “water” falls to its normal level we will be confronted with the results on economy and society, on our inhabitants and companies.

What is the financial risk outlook for this year? The Financial Services Authority (FSA) launched its report. It is clear: It will affect the public domain. They need for quality information is high, for the sake of good public governance.

In the foreword the FSA brings forward: “Over the last 18 months, and with increasing intensity over the last 6, the global financial system has suffered its greatest crisis in more than 70 years. At the core of that crisis was a collapse of confidence in some major banks in several countries. Intervention by the authorities in a wide range of countries – recapitalisation, funding guarantees and central bank liquidity – prevented a collapse of the banking system, successfully protected retail depositors, and avoided the failure of systemically important commercial banks. But, the ability of banks to perform their essential function of lending to the real economy is still impaired and deleveraging of banks, other financial institutions and households is exerting deflationary pressure on the real economy, making the scale and length of the economic downturn very difficult to predict.”

“Macroeconomic and financial system risks have become more closely interconnected than in previous years. The future health of the financial system will be critically influenced by the pattern of economic growth or contraction, and therefore the severity of credit losses arising in the real economy. But, to a far greater extent than in any other recent economic downturns, real economic developments are in turn likely to be affected by the ability of the banking system to maintain lending.” What are the interventions, the exceptional measures and the changes in our regulatory policies which are used to contain financial risks. It are important thoughts for all within the public domain.

Download Financial Risk Outlook 2009
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