The Bankwatch

Tracking the consumer evolution of financial services

OECD Interim report on global economy released 31st March 2009

In advance of the G20 meeting Thursday, OECD have released their interim review of world economies.

[local pdf] [local pdf]

It is an 150 page document of immense coverage, and you will find a few pages for your country there as well.  The introduction highlights the scope of this economic situation as it impacts the entgire world economy.  Note the negative GDP growth over two quarters in 208 and 2009, with modest improvement forecast (with caveats) for 2010. [upper right of the table].

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The caveats for 2010 are key to the report, and are largely based on assumptions for banking related matters (page 31)

  1. increased and increasing US foreclosures and their impact on value of mortgage backed securities.  This is direct impact on banks’ balance sheets
  2. ‘particular debtors’ going bankrupt and that impact on banks balance sheets.  I read this as the Auto sector mainly
  3. further reduction in equity values with again impact on banks balance sheets

However it is not all doom and gloom. 

Not all the risks are on the downside. The unprecedented monetary and fiscal policy stimulus put in place throughout OECD countries could prove to have more powerful effects than projected. Also, it is possible that financial markets return to normality faster than assumed in the projections, in  which case the recovery could be earlier and stronger than projected.

Some extracts on stock markets around the world and US foreclosures.

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Written by Colin Henderson

March 31, 2009 at 09:58

Posted in Uncategorized

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