European corporates still seeking liquidity
Access to low-cost working capital among European corporates remains a key concern, according to research from Siemens Financial Services New research from Siemens Financial Services has revealed that liquidity remains the top financial priority for European companies as they focus on obtaining working capital at a reasonable price. This comes at a time when commentators remain concerned about the pace of European economic recovery. As a result, traditional ?relationship' lending by banks ? the main source of finance for small and medium-sized enterprises ? is shrinking, and companies are therefore seeking alternative financing methods.
Key findings from the research, which sought the views and opinions of Europe's top 1000 company financial managers, include:-
*The top financial priority for European businesses through to the end of 2005 is to gain liquidity, in an economic atmosphere where lines of credit continue to tighten, despite signs of economic recovery and growth.
*The second priority for European firms is to replace the financial stability of relationship bank lending with other sources of mid- to long-term finance, cushioning those companies from temporary market and economic volatility.
*In the light of increasingly stringent financial regulations across Europe as a result of balance sheet engineering scandals, and calls for transparency in financial reporting, balance sheet liability management has now become a lower financial priority.