3. Agenda
13:45 - 14:30 Opening panel
• Financial/Sovereign Debt/Euro Crisis
Lessons learnt – What’s next?
14:45 - 15:45 Break-out 1
• Treasury Organisation - A global crisis needs a global solution -
Has your treasury model evolved to meet today's challenges?
Peter van Rood (Akzo Nobel), Damien McMahon (PwC)
• Risk Management Commodity Trading - No longer just for the
traders!
Greg Leck (Triple Point), Richard Cornielje (KYOS)
Olivier Kaczmarek (PwC)
• Bank account management - BAM or eBAM? For sure, time to
onboard. But when and where to start?
Francois Masquelier (RTL Group), Yves Garagnon (Equity),
Carlo Palmers (Swift), Sophie Parker (HSBC), Richard Delvaux (PwC)
15:45 - 16:15 Coffee break
4. Agenda
16:15 - 17:30 Break-out 2
• Governance & Regulation - Regulation, regulation, regulation,
are you prepared?
Richard Raeburn (EACT), Hans Candries (PwC)
• Technology - Latest Treasury Technology - New tools to navigate
your way through the storm
Peter Reynolds (Reval), Patrick Coleman (IT2), Jon Purr (SunGard), Steve
Lambillotte (SAP), Gaëtan Dumont (UCB), Daphné Smets (PwC), Damien
McMahon (PwC)
• Tax - Taxation to pay the debt burden – Who will pay the bill?
Philippe de Clippele (PwC), David Ledure (PwC)
17:30 - 18:30 Closing panel
• Impact of the Financial Crisis - Bank & corporate views
18:30 - 20:00 Cocktail and Italian Wine Tasting Session
10. Outline
• The Big Issues
• Growth
• The trouble with Europe
• Convergence or divergence?
• Regulation
• Conclusion
Economic Research | Janaury 2012 | 10
12. World growth
Growth world economy (in %)
6
5
Forecasts BNPP
4
3
2
1
0
-1
92-01 02 03 04 05 06 07 08 09 10 11 12 15
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13. Emerging markets versus submerging markets?
GDP growth: past and future
8
7
6
5
4
3
2
1
0
World Advanced US EMU Japan Emerging
Economies Economies
1983-2000 2016
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14. Debt or alive?
Source: IMF
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15. To boldly go where no central bank has gone before…
Policy Rates
20
18
ECB Federal Reserve Bank of England
16
14
12
10
8
6
4
2
0
Jan-80
Jan-82
Jan-84
Jan-86
Jan-88
Jan-90
Jan-92
Jan-94
Jan-96
Jan-98
Jan-00
Jan-02
Jan-04
Jan-06
Jan-08
Jan-10
Jan-12
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17. Loss of confidence…
Business Confidence Evolution of nominal long term interest rates over
3 the last 5 years
6
2
5
1
4
0
3
-1
2
-2
-3 ISM IFO BNB 1
German Bund 10Y US Treasury Bond 10Y
-4 0
00 01 02 03 04 05 06 07 08 09 10 11 jan/07 jan/08 jan/09 jan/10 jan/11 jan/12
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18. The United States is alive…
US: Real GDP Growth (% YoY)
6
5
4
3
2
1
0
00 01 02 03 04 05 06 07 08 09 10 11
-1
-2
-3
-4
-5
-6
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19. 100
125
150
175
200
225
75
jan/00
jan/01
jan/02
jan/03
jan/04
jan/05
jan/06
jan/07
jan/08
Case Shiller House Price Index
jan/09
jan/10
jan/11
…but still on intensive care
0
2
4
6
8
10
12
feb/82
feb/84
feb/86
feb/88
feb/90
feb/92
feb/94
feb/96
feb/98
Economic Research
feb/00
|
feb/02
Unemployment rate (in %)
feb/04
feb/06
Janaury 2012
feb/08
|
feb/10
19
20. Growth as an export product…
Bron: IMF
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21. The West is no longer in the driving seat
Energy consumption Commodities (Rebased Jan 2000 = 100)
600
CRB Commodity Price Index
Copper
500 Grains (Corn)
Metals
400
300
200
100
0
00
01
02
03
04
5
6
7
8
9
0
1
12
/0
/0
/0
/0
/0
/1
/1
n/
n/
n/
n/
n/
n/
j an
j an
j an
j an
j an
j an
j an
ja
ja
ja
ja
ja
ja
Source: BP Energy Outlook 2030
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27. Europe does not have a debt problem…
Public Debt in 2011 (% GDP) Primary Budget deficit in 2011 (% GDP)
250 0
200 -2
150 -4
100 -6
50 -8
0 -10
USA EMU UK Japan USA EMU UK Japan
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29. The boat gets rocked
10Y Government Bonds: Interest rate spread 10Y Government Bonds: Interest rate spread
with German Bund 10Y (in bp) with German Bund 10Y (in bp)
4000 4000
3750 3750
3500 3500
3250 3250
3000 3000
2750 2750 Belgium
Belgium
2500 2500 Greece
2250
Greece
2250
Italy
2000 Italy 2000
1750 1750 Spain
Spain
1500 1500 Portugal
Portugal
1250 1250
France
1000 France 1000
750 750 Ireland
Ireland
500 500
250 250
0 0
01/00 01/01 01/02 01/03 01/04 01/05 01/06 01/07 01/08 01/09 01/10 01/11 01/12
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30. …German rates but no German behaviour
Competitiveness (1999 = 100)
115.0
110.0
105.0
100.0
95.0
90.0
BLEU Germany
Greece Spain
85.0
France Ireland
Italy Netherl
80.0
ju 4
ju 5
ju 6
ju 7
ju 8
ju 9
ju 0
ju 1
ju 2
ju 3
ju 4
ju 5
ju 6
ju 7
ju 8
ju 9
ju 0
l/9
l/9
l/9
l/9
l/9
l/9
l/0
l/0
l/0
l/0
l/0
l/0
l/0
l/0
l/0
l/0
l/1
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33. …affecting everybody
Bank Credit Spreads
(senior 5-year CDS)
700
US Europe
600
Asia UK
500
400
300
200
100
0
jan/08 jan/09 jan/10 jan/11 jan/12
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34. The Unholy Trinity
Sovereign
Economy Financial Institutions
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35. Quid…
EFSF: €440bn ESM: €500bn
IMF ECB
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36. …pro quo
Change in Primary Budget Balance (% of GDP)
Change in Primary Budget Balance (% of GDP)
2013-2012
2012-2011
LOOSER TIGHTER TIGHTER
US US
UK UK
EMU EMU
Portugal Portugal
Greece Greece
Ireland Ireland
Italy Italy
Spain Spain
Netherlands Netherlands
Germany Germany
France France
Belgium Belgium
-2 -1 0 1 2 3 4 0 1 2 3 4
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37. Ready for the climb?
Cyclically adjusted primary budget balance
(% of potential GDP)
8
6
4
2
0
-2
-4
-6
-8
-10
75 80 85 90 95 00 05 10
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38. Austerity for years to come…
Required CAPB, 2020-30
2020
Highest primary balance, 10-year rolling average
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39. Regulation
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40. Basel III: the message to banks
1. Reduce leverage ratio => smaller balance sheet
2. Higher solvency ratio => hold more capital
3. Liquidity coverage ratio => have high quality liquid assets to survive stress
4. Stable funding ratio => hold more stable liquidity
• More selective with risks
• More selective with long-term credits
• The dash for cash
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41. Conclusion
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42. Conclusion
• Growth => not enough in the West
• Debt => far too much in the West
• Austerity => for years to come
• Inflation => structurally low and sensitive to commodities
• Policy rates=> central banks keep rates low to help deleveraging
• Regulation => Banks more careful with liquidity and credit
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43. “The best thing about the future is
that it comes one day at a time”
-
Abraham Lincoln (1809 -1865)
Economic Research | Janaury 2012 | 43
48. Closing session
Impact of the Financial Crisis
Bank & corporate views
• Vincent Van Quickenborne
(Deputy Prime Minister and Minister of Pensions, former Minister of Economy)
• Richard Raeburn
(Chairman EACT)
• Peter van Rood
(Akzo Nobel Group Treasurer)
• Yvan De Cock
(Head of Corporate and Public Banking Belgium and Member of the Executive
Committee of BNP Paribas Fortis)
• Auke Leenstra
(Citibank Country Officer Netherlands and Co-Head in the Benelux)
• Didier Vandenhaute
(PwC)