The crisis for all, except for the bankers?  - Finance

The crisis for all, except for the bankers? – Finance

For companies and individuals, the year of all dangers is not 2022, but 2023.

Yesterday I was on the phone for quite a long time with the manager of a small bank. What struck me was that he had the same speech as the bosses of the 4 biggest banks. Namely, that these bankers do not yet see the crisis in their accounts. I say “not yet”, because I have to be careful. Things could change. But it’s true that if you look at the numbers, our banks all posted record results for the first half of the year. None, for the moment, complains of a higher credit default rate or a wave of non-repayments of mortgage loans or personal loans.

It is astonishing compared to what one can read here or there. Besides, I know that our Prime Minister is in permanent contact with these bankers to whom he asks the same question as me, and I also know that he gets the same answer as yours truly. Is it also for this reason that decisions on aid to households and businesses have been delayed? I don’t know, but it’s a disturbing coincidence. One of the explanations to justify this divorce from the real life of our fellow citizens and from what the media tell us is that the bankers are actually looking at the figures of the past. In other words, our bankers would be victims of a rear-view mirror effect.

Yes, things are still going well now, but what about tomorrow or the day after? It is true that a lot of companies were able to pass on the price increase to their customers. But this repercussion of inflation cannot be done systematically unless these customers are lost. And then the real question is what will happen after January 2023, when wage indexation will be 10%. There, it might be quite rock and roll. In fact, for companies, the year of all dangers is not 2022, but 2023.

As for households, we know that certain segments of the population are already suffering martyrdom because of the increase in their energy bill. But there again, except to think that these people are not banked, which would be surprising, the banks show no delay in payment, whether for mortgage loans or personal loans. How to explain this? For the poorest people, one of the explanations given to me is that these precarious families will do everything to pay these monthly payments in order to keep a roof over their heads. As a result, the savings are made on other items. The distress of these families is real even if the banks do not see it in their accounts. What is also unfortunate in Belgium is that our government and our Regions are not statistically equipped to be able to target the people who really need help. The result is when aid is finally released, it waters all households, even those who do not need it. And inevitably, this aid is ridiculous, because instead of targeting people in distress, it must be divided by the greatest number. As for the other households, those of the middle class, they still manage to do the big back, thanks to COVID and the forced savings that this virus has imposed. But here again, we can clearly see that households are starting to dip into this forced savings to get through the winter.

In reality, everything will be decided in 2023, inflation should stop rising and could normally be halved or tripled. And if the conflict were to stop, which everyone hopes, we could even see a rebound in the economy comparable to what we saw at the end of COVID. But for now, this is not the scenario chosen by economic institutions or by the media. Politicians, meanwhile, have chosen the discourse of tears and blood, the discourse of the very harsh winter. Normal, if they are right, they will be able to say that they had warned us, and if they are wrong, they will say that they managed the crisis well. The Covid has been there, and our politicians have learned some media lessons – for the rest, we just have to reassure ourselves by telling ourselves like Coluche: “Can’t wait for tomorrow everything to be like yesterday” .

Yesterday I was on the phone for quite a long time with the manager of a small bank. What struck me was that he had the same speech as the bosses of the 4 biggest banks. Namely, that these bankers do not yet see the crisis in their accounts. I say “not yet”, because I have to be careful. Things could change. But it’s true that if you look at the numbers, our banks all posted record results for the first half of the year. None, for the moment, complains of a higher credit default rate or a wave of non-repayments of mortgages or personal loans. This is surprising compared to what we can read here or there. Besides, I know that our Prime Minister is in permanent contact with these bankers to whom he asks the same question as me, and I also know that he gets the same answer as yours truly. Is it also for this reason that decisions on aid to households and businesses have been delayed? I don’t know, but it’s a disturbing coincidence. One of the explanations to justify this divorce from the real life of our fellow citizens and from what the media tell us is that the bankers are actually looking at the figures of the past. In other words, our bankers would be victims of a rear-view mirror effect. Yes, things are still going well now, but what about tomorrow or the day after tomorrow? It is true that a lot of companies were able to pass on the price increase to their customers. But this repercussion of inflation cannot be done systematically unless these customers are lost. And then the real question is what will happen after January 2023, when wage indexation will be 10%. There, it might be quite rock and roll. In fact, for companies, the year of all dangers is not 2022, but 2023. As for households, we know that certain segments of the population are already suffering martyrdom due to the increase in their energy bills . But there again, except to think that these people are not banked, which would be surprising, the banks show no delay in payment, whether for mortgage loans or personal loans. How to explain this? For the poorest people, one of the explanations given to me is that these precarious families will do everything to pay these monthly payments in order to keep a roof over their heads. As a result, the savings are made on other items. The distress of these families is real even if the banks do not see it in their accounts. What is also unfortunate in Belgium is that our government and our Regions are not statistically equipped to be able to target the people who really need help. The result is when aid is finally released, it waters all households, even those who do not need it. And inevitably, this aid is ridiculous, because instead of targeting people in distress, it must be divided by the greatest number. As for the other households, those of the middle class, they still manage to do the big back, thanks to COVID and the forced savings that this virus has imposed. But here again, we can see that households are starting to dip into this forced savings to get through the winter. In reality, everything will be decided in 2023, inflation should stop rising and could be halved by three normally. And if the conflict were to stop, which everyone hopes, we could even see a rebound in the economy comparable to what we saw at the end of COVID. But for now, this is not the scenario chosen by economic institutions or by the media. Politicians, meanwhile, have chosen the discourse of tears and blood, the discourse of the very harsh winter. Normal, if they are right, they will be able to say that they had warned us, and if they are wrong, they will say that they managed the crisis well. The Covid has been there, and our politicians have learned some media lessons – for the rest, we just have to reassure ourselves by telling ourselves like Coluche: “can’t wait for tomorrow that everything be like yesterday”.

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