For the popular press the banking profession is a poisonous mixture of arrogance, incompetence and greed. They may have made their elegant apologies to a committee of MPs for the mess they have made of their once mighty corporations, but they are still held responsible for dragging down the rest of the economy as well. And just to cap it all, some bankers are insisting on taking bonuses despite the fact that the industry is being bailed out by taxpayers’ billions. While there is nothing like venting fury (justified or not) we all have to realise we live in an economy which is driven fundamentally by the provision and acceptance of credit. To move towards an upturn in commercial fortunes it is vital that the providers of credit start to do their jobs again so that the global economy can start recovering. But it is not a question of bankers throwing money at any business or individual that wants it. After all, if the sub-prime crisis was about anything it was that someone somewhere forgot the basics that you only lend money to somebody if you think there is a better-than-reasonable chance of them paying it back. Obvious? Apparently not at one time. While it is clear that banks are jumpy and do not always act rationally at the moment, corporates must ensure that they are in a position to help the banks as well as themselves. Treasurers are central to this process. Like never before, treasurers and finance directors need to ensure that they are as well prepared as they can be when they go hunting for finance. The financials have to make sense in the present climate, the story has to hang together, and treasurers and their FDs have to know their brief inside out. Don’t give the banks any excuse to say no (such as the figures presented literally not adding up). With company revenue streams in decline, the banks want real comfort over the security of their advances. So treasurers need to ensure they explore every source in their hunt for funding. The ACT has been working hard with others such as the Bank of England to provide alternative avenues through buying corporate paper and loans. And that is how we are all eventually going to emerge from this crisis: those who want credit and those whose job it is to provide credit working together to find innovative solutions as we edge slowly into a new and as yet unchartered era of financing. Treasurers need to be alert to the possibility of the new and ready to learn different rules. PETER WILLIAMS EDITOR
