As The Banker went to press, the International Monetary Fund (IMF) was forecasting the first full-year slump for the world’s developed economies since the Second World War. What had until recently been a credit crunch for banks has become a corporate crunch. Nothing highlights the pitiable state of the world economy more than ships lying dormant in ports across the globe. The world’s trade arteries are slowly clogging as manufacturers struggle to finance their trade and demand dries up.
By early November, the Baltic Dry Index, a benchmark for shipping costs and indicator of global economic activity, had hit its lowest point since 2002. Across the world insolvencies are on the rise. The most recent data from the UK’s Insolvency Service showed that in the third quarter of 2008 company administrations increased by more than 7% on the previous three months, and by almost 51% on this time last year.
