More NewsAFP Conference On-site Survey Shows Fiscal Cliff Major Concern for US Finance Professionals

AFP Conference On-site Survey Shows Fiscal Cliff Major Concern for US Finance Professionals

Three-quarters of executives that manage corporate cash fear the consequences of the so-called fiscal cliff, according to the Association for Financial Professionals (AFP), which surveyed the 6,000 attendees at its Annual Conference in Miami on Monday 15 October, obtaining 949 responses. The finance and corporate treasury respondents, from corporations that typically have revenues in excess of US$500m, believe the US economy will worsen without action to address the tax cuts and automatic spending cuts that are due to kick in at the end of the year.

Responding to an survey at the 2012 AFP Annual Conference, 39% of finance executives said that sluggish economic conditions and weak demand are also uncertainties discouraging their companies from making strategic investments in expansion and hiring.

Regardless of which candidate wins the US presidential election this November, 63% of the survey respondents expect the election to have no significant impact on business conditions and 71% anticipate no significant change in their investment spending after the elections.

“Companies are looking beyond the elections,” said Jim Kaitz, president and chief executive officer (CEO) of AFP. “The most important issue is resolving long-term fiscal and deficit issues.” Negotiating the fiscal cliff and putting the country’s finances on a sound footing are the key aims of corporate treasurers.

Asked what they saw as the most important areas for Washington, DC to focus on after the election in order to better support business activity and economic growth, the surveyed finance and treasury professionals indicated:

  • Resolving long-term fiscal/deficit issues (63%).
  • Implementing changes to avoid the fiscal cliff (49%).
  • Reducing regulatory complexity and uncertainty (42%).
  • Resolving political gridlock and improving the tone of political debate (37%).
  • Corporate tax reform (33%).
  • Policies aimed toward the safety and soundness of the banking system (20%).
  • Addressing unfair and anti-competitive practices of foreign companies (10%).

Asked if they expected lower corporate bank balances when the unlimited federal deposit insurance corporation (FDIC) insurance on non-interest bearing transaction accounts expires at the end of the year, 48% saw no significant change while 49% expected to lower their balances.

“This survey reiterates our view that treasury professionals see regulatory change as a significant concern for their business,” said Bob Stark, vice president of strategy at Kyriba, sponsor of the survey. “It is also very interesting to note, although not entirely surprising, that half of the respondents expect to reduce their cash held in bank accounts at the start of next year. This change will increase the need for improved cash visibility, a trend we have seen throughout the market.”

Related Articles

Infosys Finacle to power Santander UK’s international cash management system

More News Infosys Finacle to power Santander UK’s international cash management system

4m The Global Treasurer
Preparing for GDPR? Here’s four things to consider

More News Preparing for GDPR? Here’s four things to consider

7m Elliott Wiseman
Cash flow in focus for investors

Cash Management Cash flow in focus for investors

8m Conor Deegan
Treasury TV: Karen Pugsley, Domino's Pizza Group

More News Treasury TV: Karen Pugsley, Domino's Pizza Group

8m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

8m Victoria Beckett
Treasury TV: Tim de Knegt, The Port of Rotterdam

10 Minutes With The Treasury Treasury TV: Tim de Knegt, The Port of Rotterdam

9m Victoria Beckett
Banks are selling clients short with short dated cash deposit U-turns

Banking Banks are selling clients short with short dated cash deposit U-turns

9m Victoria Beckett
What does sterling’s Brexit boost mean for UK manufacturers?

More News What does sterling’s Brexit boost mean for UK manufacturers?

9m Tasja Botha