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Recession:
How will you play to win?
CFO Program Brief
Disclaimer
留学生论文This publication contains general information only and Deloitte Services LP is not,by means of this publication, rendering accounting, business, fi nancial, investment,legal, tax, or other professional advice or services. This publication is not a substitutefor such professional advice or services, nor should it be used as a basis for any
decision or action that may affect your business. Before making any decision ortaking any action that may affect your business, you should consult a qualifi edprofessional advisor. Deloitte Services LP its affi liates and related entities shall not beresponsible for any loss sustained by any person who relies on this publication.
Contents
1 Introduction
1 The recession
2 The credit crisis playbook
4 The downturn playbook
8 Recovery playbook
9 Playing in a risky world
10 Conclusions
12 Endnotes
Deloitte’s CFO Program harnesses the breadth of our capabilities to deliver forward
thinking perspectives and fresh insights to help CFOs manage the complexities of
their role, drive more value in their organization, and adapt to the changing strategic
shifts in the market.
CFO Program Brief – Recession: How will you play to win 1
Introduction
After many years, the dreaded “R” word is back to
haunt executives in the world economy. The global
credit crisis accelerated a recession in the United States
that started in the last quarter of 2007. The major
European economies and Japan are also in a recession,
and economic growth rates in emerging markets
slowed considerably in the latter part of the year. While
recessions are inevitably challenging, some leaders
seize opportunities to outdistance their competition
and position themselves for future growth. Strategic
responses based on an analysis of the current economy
and research on how consumer and industrial product
companies outperformed their peers in prior recessions
can help chief fi nancial offi cers navigate the current
downdraft.
The recession
Prior to August 2008, the recession in the United States
seemed closer in characteristics to the recessions of the
early 1970s and early 1990s. A shallow downturn was
characterized by two defi ning features: (1) infl ationary
pressure in the price of commodities such as oil, food,
and materials due to expanding global demand rather
than contracting supply; (2) a shortage of critical talent
in various industries due to demographic shifts such as
retiring Baby Boomers.
The rules changed in September 2008 after the
bankruptcy of Lehman Brothers. This event exposed
a lack of transparency and the potential magnitude
of counterparty risk in the global fi nancial system.
Investment banks had operated like hedge funds with
a tremendous amount of leverage, and securitization.
Suddenly credit markets froze, and banks, consumers
and companies scrambled to deleverage, reduce
their debt and improve their balances sheets. This
deleveraging and a lending freeze fostered a global
credit crisis that threw sand in the gears of the global
economy, triggering a more severe recession and
defl ation in housing, commodities and other assets.
From the United States to Iceland, there was a spate of
bank failures and takeovers. Major investment banks
were bought by or converted to commercial b