News item
25 Feb 10
Banks are also Customers
The average price business, in which the average from settlements is taken over a certain period, will clearly only take off after the spot and future price business is well underway. The lack of liquidity here also means that the gap between bid and ask prices is too wide to be very appealing.
In the first English edition of the publication “Finance”, the chief editor, Bastian Frien, asks an interesting question in an editorial: are banks actually the customers or the suppliers of companies. In the ongoing aftermath of the economic crisis, the financial industry has had to accept (hopefully) constructive and well-founded criticism and has had to bite the bullet not only in economic terms, but also in the effect this has had on its damaged image. Yes, even banks (at least at the moment) are customers of business and should therefore be treated as such. For companies dealing in the scrap business, this is no real eye opener, for, like money, scrap is also a scarce commodity; suppliers have to be fought for, just like customers have to be won over. In other sectors of the economy, especially in a crisis, stable and reliable key suppliers should also be just as highly valued, just like the customers too, without whom there would be no turnover. Whilst companies, however, are trying to win favours from investors for their equity and corporate bonds by means of extravagant road shows and presentations, efforts are not being made in as much the same scale for debt capital, which has become just as rare.