Center for Financial Studies (CFS) at the Goethe University Frankfurt
Center for Financial Studies (CFS) at the Goethe University Frankfurt: CFS Financial Center Index continues to rise
Center for Financial Studies (CFS) at the Goethe University Frankfurt / Key word(s): Miscellaneous CFS Financial Center Index continues to rise Financial institutions to hire and invest more / Euro crisis expected to intensify 1. Index Development
FRANKFURT, 1 February. The CFS Financial Center Index shows that financial institutions are in the market to hire new staff. Rising by another 2.9 points compared to the last quarter the index has reached a value of 115.8 points. Again both subindices (performance of the last quarter and projection of the next quarter) have increased across all areas of value creation (revenue, profits, employment, investments), indicating a further improvement of the business climate. 2. Special survey: Euro crisis The majority of the financial sector (80%) expects the Euro crisis to continue or even deepen further in 2011. A mere 15% believe that the situation will improve this year. With respect to possible measures to resolve the Euro crisis, the survey panel was confronted with 3 questions covering (1) the issuance of Eurobonds, (2) a haircut on bonds of struggling EU Member States and (3) a European harmonization of national economic policies. For each measure the panelists were asked to give both their expectation and their personal preference (see Figure 2). Eurobonds face opposition, Haircut earns approval Contrary to public comments the majority of the panel expects that a common bond will be issued by the euro zone in 2011. Four out of five, however, oppose the issuance of Eurobonds. Almost 70% of the panelists are in favor of a haircut on bonds of EU Member States that are struggling with heavy budgetary deficit. Proponents of this measure are to be found especially among the service providers (75%), and to a lesser extent among the banks (55%). Roughly 80% of those that expect a haircut, envisage that it will be enforced within the next three years, mainly in 2012 and 2013. Most of the financial service sector providers would welcome a haircut already in 2011. European coordination of national tax and budgetary policies The majority of the respondents – especially those that welcome the issuance of Eurobonds – regards it as necessary for the EU Member States to harmonize their national tax and budgetary policies: 'A greater coordination of national policies on the European level seems to be a pivotal requirement for the issuance of Eurobonds', says Krahnen. The financial sector is, however, not very optimistic about the chances for such a coordination effort; only few expect successful action in this field in 2011. Many respondents agree on what should happen to countries that do not fulfill the criteria of the growth and stability pact. 70% of the panel believe that, in these cases, sanctions should apply automatically and without exceptions. The stabilizing measures to fight the Euro crisis could also have an effect on the ECB: Every second panelist sees the independence of the ECB at stake. www.financialcenterindex.com – for graphs and further information. For any questions, please contact:
Florian Hense Tel.: +49 69 798-30090
Josef Schießl Tel.: +49 69 94 41 80 26 End of Corporate News 01.02.2011 Dissemination of a Corporate News, transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de |
110706 01.02.2011 |