As reported by Vincent Ryan in CFO Magazine
Two years after the fall of Lehman Brothers, the immense overhaul of the banking system is just beginning, and it is far too early for companies to breathe a collective sigh of relief. The banking system is safer — but not by a lot. Banks now have larger capital buffers, and the complex collateralized debt obligations (CDOs) that wrought so much destruction are nearly extinct. Yet 11% of retail banks remain at risk of failure, says the Federal Deposit Insurance Corp. (FDIC).
The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act represents not a regulatory finish line so much as the firing of a starter's pistol that will kick off a marathon of rule-making and second-guessing. Key questions remain about how much reform will come to pass, when, and what it will ultimately mean for companies. "Regulation is always in catch-up mode — there's no way around it," says Cory Gunderson, managing director of the U.S. financial services and global risk and compliance practices at Protiviti.
As for what has been settled and what hasn't, three key areas of uncertainty deserve watching: whether public bailouts of megabanks can be avoided in the future, what regulators have done to return commercial lending to normal, and whether Wall Street has been reined in too much, too little, or just enough.
CFO Best Practice Sponsor: Cambridge Consulting Group was formed more than 10 years ago to help large financial organizations reduce their costs by eliminating their leasing obligations for excess commercial real estate space. Founded by Dave Worrell, a former Corporate/Facility Director, Cambridge Consulting Group offers companies a better option than subleasing office space they no longer need or use. Using a newer financial strategy- Negotiated Lease Buyouts, Cambridge Consulting has saved Fortune 500 companies millions of dollars in commercial lease obligations. For more information please visit their website- www.ccgiweb.com or call David Worrell at 888.472.5656
Too Big to Fail?
Dodd-Frank created the Financial Stability Oversight Council, a mandated team of traditionally autonomous financial regulators who now are expected to work together to ensure that the financial system does not develop pockets of dangerous dependency. The group, which held its first meeting last month, has the daunting goal (given recent history) of eliminating "expectations on the part of shareholders, creditors, and counterparties of [large banks] that the government will shield them from losses in the event of failure," the U.S. Treasury says.
Dodd-Frank attempts to ensure that by imposing greater regulatory supervision on bank holding companies with assets greater than $50 billion. It also requires nonbank financial firms and systemically important firms within the next 18 months to develop plans for rapid, orderly unwinding of their businesses in cases of severe financial distress. But will this and any of the other proposed measures prevent the U.S. government from lavishing taxpayer funds on failed banks and being the arbiter of which banks fail and which get life-saving injections of capital?
http://www.cfo.com/article.cfm/14533054?f=search
Monday, November 1, 2010
CFO Zone Reports Cash Flow Top CFO Concern
as repoted on www.cfozone.com
It's all about the cash flow.
The biggest concern among chief financial officers these days is cash flow. Not the economy, not jobs, not health care, not the elections.According to a survey conducted by TD Bank, 69 percent of CFOs and other corporate finance managers at mid-sized businesses say they are most worried about the intense challenge of managing cash flow.The survey of 100 CFOs, controllers, treasurers and other financial executives also found that proper capital allocation and cash flow management will also be next year's top financial management priorities for 41 percent of respondents.
When it comes to cash flow, the survey respondents said the most significant risks over the next year will be an increase in non-performing accounts receivables (21 percent) and reduced sales (19 percent). Only 5 percent of respondents cite the economy as the biggest threat.While CFOs are worried about cash flow, they are not planning to take drastic action. Just seven percent of the finance executives say they plan to cut expenses in 2011.
In fact, 39 percent expect their capital investments to increase next year. Of that group, 21 percent expect an increase of 10 percent or more.One-third anticipates that capital investments will hold steady. Of course, this means roughly 28 percent are planning to cut capital investments.And the most common use for this money figures to be for new technology. This is followed by improvements to existing facilities, workforce hiring and development and office equipment.
CFO Best Practice Sponsor: Cambridge Consulting Group was formed more than 10 years ago to help large organizations reduce their costs by eliminating their leasing obligations for excess commercial real estate space. Founded by Dave Worrell, a former Corporate/Facility Director, Cambridge Consulting Group offers companies a better option than subleasing office space they no longer need or use. Using a newer financial strategy- Negotiated Lease Buyouts, Cambridge Consulting has saved Fortune 500 companies millions of dollars in commercial lease obligations. For more information please visit their website- www.ccgiweb.com or call David Worrell at 888.472.5656
What are the most likely constraints on capital investments? The finance pros most often cited cash flow (46 percent), followed by unsure levels of funding from clients and government (18 percent), as well as the political climate, including government regulations and policies (13 percent).
Otherwise, CFOs seem to share the kinds of sentiments most people seem to hold these days. For example, 78 percent acknowledge the economic recovery could take up to two years to materialize while nearly half believe the surest signs of a lasting upturn will be falling unemployment rates, sustained growth in their own organization's sales and an influx of new customers buying their products and services.
Other financial challenges include interest rate volatility, a key concern among more than half of the respondents (55 percent), followed by adequate access to credit for 52 percent.
http://www.cfozone.com/index.php/Newsflash/CFOs-Cash-flow-is-top-concern.html
It's all about the cash flow.
The biggest concern among chief financial officers these days is cash flow. Not the economy, not jobs, not health care, not the elections.According to a survey conducted by TD Bank, 69 percent of CFOs and other corporate finance managers at mid-sized businesses say they are most worried about the intense challenge of managing cash flow.The survey of 100 CFOs, controllers, treasurers and other financial executives also found that proper capital allocation and cash flow management will also be next year's top financial management priorities for 41 percent of respondents.
When it comes to cash flow, the survey respondents said the most significant risks over the next year will be an increase in non-performing accounts receivables (21 percent) and reduced sales (19 percent). Only 5 percent of respondents cite the economy as the biggest threat.While CFOs are worried about cash flow, they are not planning to take drastic action. Just seven percent of the finance executives say they plan to cut expenses in 2011.
In fact, 39 percent expect their capital investments to increase next year. Of that group, 21 percent expect an increase of 10 percent or more.One-third anticipates that capital investments will hold steady. Of course, this means roughly 28 percent are planning to cut capital investments.And the most common use for this money figures to be for new technology. This is followed by improvements to existing facilities, workforce hiring and development and office equipment.
CFO Best Practice Sponsor: Cambridge Consulting Group was formed more than 10 years ago to help large organizations reduce their costs by eliminating their leasing obligations for excess commercial real estate space. Founded by Dave Worrell, a former Corporate/Facility Director, Cambridge Consulting Group offers companies a better option than subleasing office space they no longer need or use. Using a newer financial strategy- Negotiated Lease Buyouts, Cambridge Consulting has saved Fortune 500 companies millions of dollars in commercial lease obligations. For more information please visit their website- www.ccgiweb.com or call David Worrell at 888.472.5656
What are the most likely constraints on capital investments? The finance pros most often cited cash flow (46 percent), followed by unsure levels of funding from clients and government (18 percent), as well as the political climate, including government regulations and policies (13 percent).
Otherwise, CFOs seem to share the kinds of sentiments most people seem to hold these days. For example, 78 percent acknowledge the economic recovery could take up to two years to materialize while nearly half believe the surest signs of a lasting upturn will be falling unemployment rates, sustained growth in their own organization's sales and an influx of new customers buying their products and services.
Other financial challenges include interest rate volatility, a key concern among more than half of the respondents (55 percent), followed by adequate access to credit for 52 percent.
http://www.cfozone.com/index.php/Newsflash/CFOs-Cash-flow-is-top-concern.html
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