Shared fears, gloomy prospects

According to Péter Biczó, director of PricewaterhouseCoopers Kft, the most important conclusion to be drawn from the past 12 months is that uncertainty can be predicted for certain. Banks have become much more cautious than before, which makes it much more difficult for SME-s to obtain financing. This may be compensated for in part by the JEREMIE program, which has been developed by the EU. The financing policy adopted by Hungarian banks is more prudent than in Western Europe, which means they are exposed to lower risk in the real estate market. According to an international survey about risk factors for banks, conducted by PricewaterhouseCoopers, bankers share the same fears in most markets. The Banana skin index has reached its highest value since 1988. The lack of liquidity, current market trends and limited supply in the credit market are the biggest concerns for bankers, because these might be signs of a global recession coming. Liquidity and the increasing cost of credit have not ever made the top three on the list of concerns before. The same concerns are shared by all significant markets in regard of macroeconomic prospects. Quite surprisingly, over regulation has dropped from the first to the eighth place on the list of Banana skin concerns. While over regulation is regarded as a bigger risk by market players in developed economies, the cost of financing and difficult access to financing are primary concerns in developing markets. Concerns are the same in the Central Eastern European region as elsewhere, but the effects of the crisis on risk management, the costs of financing and HR issues are seen differently. Fraud, crime in general and the marketing of retail services pose the greatest problems in this region. However, over regulation and the sensitivity of interest rates are less of a concern than elsewhere, with political instability at the bottom of the list.