Majority of Investors Think Defeated Legislation Would Work
More than 60% of institutional investors, large companies and pension funds around the world think the US$700bn government bailout rejected by the US House of Representatives would have a good chance of restoring stability to financial markets if implemented, according to a survey by Greenwich Associates. “If the vote on the bailout had been held among the institutional investors and companies that rely on functioning financial markets to conduct their business instead of in the House of Representatives, it would have passed,” said Greenwich Associates consultant Steve Busby. Greenwich Associates surveyed 905 institutional investors, large companies and pension funds in North America, Europe and Asia about the US government’s plan to rescue financial markets. Regardless of their take on the specific legislation in front of Congress, nearly two thirds of survey respondents believe that some form of government intervention will be required to shore up markets. On average, those surveyed do not expect global financial markets to bottom out until the third quarter of 2009 at the earliest. While one third of respondents believe markets can recover within the next six months, 35% think the downturn will last between seven and 12 months and nearly a quarter believe the market will not hit bottom for one to two years. More than 5% think financial markets will not recover for two years or more.