A ten item Trade credit insurance checklist to help prepare companies for 2012

By Ron Doyle

While we all are wishing for a prosperous, productive and healthy 2012, we have to be realistic. At best, the world economy will experience slow growth or possibly a regional or global recession.

The annual reports of banks should show how much actual exposure they have to toxic sovereign debt and what provisions the banking industry will need to make. The situation will undoubtedly impose a need to raise capital. As I have stated before, this demand will impact the commercial credit markets, as banks will be required to restrict lending and demand higher credit quality.

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The Perfect Storm! Be Prepared for the trade credit risks your business may be facing soon

By Ron Doyle

My last blog post asked whether you were losing any sleep over the debt crises in Europe and the USA. I then went on to suggest that perhaps you should be worried due to four factors:

1. The impact of sovereign debt on bank liquidity
2. The deepening debt crisis in the USA
3. The cuts to government spending in Europe and North America
4. European countries possibly having to leave the Euro and revert to old currencies

The likelihood of the events listed above all occurring together would have been fairly improbable a year ago, but now the level of probability has increased significantly as government leaders appear to be incapable of coming up with solutions.

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Contagion – now a word heard often in relation to economic financial crisis

By Ron Doyle

When I wrote a series of blog posts, starting in July 2010, “contagion” was a word seldom heard in a financial context. Six months later, it’s a buzz word in the papers every day and used in the same context as in my blog posts.

The premise for "contagion" is that large sovereign debts can not be contained to one or even a group of countries. The infection spreads to other countries and financial institutions. Brian Milner in his Globe and Mail article of November 30, 2010, Contagion spreads to euro zone banks, and Rex Merrifield, in his Reuters UK story, Euro zone periphery hammered as default fears rise - also published in the Globe's Report on Business - clearly explain how the contagion is likely to spread further.

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