Risk experts expect the worst effects of the credit crisis to drag on into next year
Risk professionals do not expect the worst effects of the credit crunch to be over before mid-2010, a survey found.
Worse still, 39% expected the downturn to last longer than 2010.
Risk professionals say the key reason is the state of the securitisation markets which have come to a standstill, said GRS, authors of the research.
Those who expect a return to ‘normality’, think it will take an average of six years. But 23% of risk professionals say we’ll never see a return to 2006 pricing levels.
Richard Lumley, managing director of GRC risk consultants, said: ‘Given the huge impact and resulting losses over the last 18months I would expect to see significant changes in the risk management landscape over the next 2 years. This should provide opportunities for risk managers to restructure and better align their teams.’
‘One of the remaining long-term threats to financial institutions is the state of the securitisation markets, which are unanimously expected to take far longer to recover.’
He added: ‘Lending to businesses and individuals will continue to be restricted, more expensive and some specialist firms will not survive.’