Ignoring risk led to downturn says expert
ECconomic recovery could be accelerated by creating an environment in which banks and businesses accept a reasonable return for a reasonable risk, according to the chairman of Northern Ireland’s professional insolvency body.
Addressing the annual dinner of the Northern Ireland Region of the Association of Business Recovery Professionals, Garth Calow said ignoring high levels of risk had contributed to the recent global economic downturn.
“A fundamental element of the crisis was that the expectation of reward blinded too many organisations and individuals to the level of risk they were taking in the pursuit of profit.
“Our immediate objective must be to restore liquidity to the markets while redefining new and more acceptable levels of risk and reward.
“Without liquidity, business investment and transaction activity will remain almost non-existent; there will be no real growth in the housing market and business confidence will remain flat.”
“We can accelerate economic recovery by abandoning historically unsustainable expectations of risk and reward.”
Mr Calow said that, as Northern Ireland faced inevitable cuts in public spending, an already nervous private sector needed more certainty that the focus of the Assembly will be on the economy.
“If an agreement on the transfer of policing and criminal justice represents a final settlement of the last of the outstanding issues from the Belfast Agreement, the business community will welcome the undivided attention of the Executive in dealing with the current vulnerabilities within our economy,” he said.