ON ‘GETTING YOUR HOUSE IN ORDER’

As Prime Minister Cameron reminded President Sarkozy and Chancellor Merkel today in a Financial Times interview, time is running out for the Eurozone to put its house in order if it is to retain its credibility and the market’s confidence.

There are similarities with the current situation in our industry, that if the industry doesn’t address effectively its problems in the short term they are likely to continue to haunt us in the future rather project the image that we need to, that of a confident, relevant, forward-looking and consumer orientated industry, who can count on the continuing support of specialist banks in both good and bad times.

In my blog in Feb 2010 I referred to the confidence gap opening up between the Western world and the emerging BRIC countries. While it is certainly true when expressed in terms of GDP and growth, economic interdependence cannot be de-coupled in terms of overall confidence levels. Are the Chinese or Indians overly concerned about the effects of a Greek default? Definitely not in terms of immediate bank exposure (like the Europeans) but there is no doubt that they will be watching matters closely to see whether the European Union emerges with its economic credibility in tact or in tatters.

Once again the leadership role for our industry falls upon the shoulders of the DTC in particular, the Indian industry and the bankers and as long as they all behave responsibly confidence will return in spite of what’s happening in the wider world.

There is an significant difference between our industry and the situation the EU finds itself in - the EU is struggling to improve institutions and processes that address the banking and confidence issues that have become so inextricably linked. In our industry we already have the marketing structures and specialist banks and the DTC’s leadership which allows us a clearer recovery path than there appears to be in Europe at present.