Talking Shop: Everyone Has a View on the Global Economic Crisis, but What Do They Suggest Can Be Done about It?
Dominique Strauss-Kahn, managing director, International Monetary Fund:
"If there's not a restructuring of the banking system, then all the money that you can put into [monetary and fiscal] stimulus will merely go into a black hole... The reality is that one dollar spent in restructuring the banking sector today is much more useful to achieve recovery than the same dollar spent on bridges, hospitals and so on."
Peter Hemington, corporate finance partner at BDO Stoy Hayward:
"A 1.5 per cent fall in GDP is hardly a surprise in the context of a non-functioning banking system. But, contrary to popular reports, the UK is not bankrupt. Whatever people may try to tell you, the government's measures to deal with the banking crisis are sensible.
"Maybe conditions are not going to get any better for a while, but at least they probably won't get any worse."
Robin Johnson, partner at law firm Eversheds:
"While there has been a focus on remuneration in recent years, the downturn has shifted it to audit committees and their functions. To be effective, the audit process really needs to be a five-way street, with outside auditors, internal management, the audit committee, institutional investors and the Financial Services Authority all working together.
"Over the years we have had reports on internal controls, culminating with Turnbull and the Combined Code, but they concentrated on identifying risk on a generic basis in a business. Risk has become a standard--maybe too standard--agenda item in board meetings. Now the focus has shifted to the fundamental nature of a company's going concern and matters of emphasis in accounts. More attention needs to be paid to liquidity and counterparty risk.
"The Financial Services Authority has flagged up the need to announce promptly any problems with counterparty risk and liquidity rather than waiting for a preliminary announcement. All this points to each stakeholder being nervous of the other. We need more co-operation. For once, director liabilities are very real. A business review introduced by the Companies Act 2006 will become a key part of any firm's report and accounts. …