1. In a cyclical industry like the forest industry, our revenues are volatile. During a down cycle our profits go down and during the up cycle profits improve. To reduce the impact of this cyclicality, our financing is generally linked to a short-term rate.

1. At present, the interest rates in the eurozone are at historically low levels. BASF recently took advantage of these favourable market conditions and issued a seven-year fixed-rate euro benchmark bond that was placed in May. We have another fixed-rate long-term bond outstanding that will mature in 2010.

TREASURERS’ questions:
1. What effect is the declining dollar having on your treasury operations?
2. What are your views on in-house versus outsourced cash management?
3. In what areas can banks improve their products and services offering to your business?

CFOs’ questions:
1. What do you think will be the impact of higher interest rates on capital markets strategies in your sector?
2. How do you balance the demands for disclosure and transparency with the cost of compliance?
3. What do you think could be done to improve corporate pension schemes?

Spain is home to the world’s fastest-growing market in covered bonds. As banks discover the benefits, the country is also set to become the world’s largest issuer.

The Banco de España, Spain’s central bank, has been praised for balancing a forward-looking attitude to market liberalisation with a prudent approach to risk management. Governor Jaime Caruana talks to Peter Wise.
Q What are the main drivers for – and possible threats to – medium-term economic growth in Spain?

A The Spanish economy has maintained a pattern of growth in recent years based essentially on domestic consumption and construction.

Audacious moves by Spain’s two giant banking groups will take them into uncharted territory in Europe. Will they keep their thrones?Peter Wise reports.

Michael Kuser examines the likely development of Turkish housing finance as the government works to build a mortgage market.

Despite a slow start, Serbia has come on in leaps and bounds to put itself well in the running for a place in the EU, says Eric Jansson.

Q What are the benefits of early compliance with CSR?
A In The Millennium Poll on Corporate Social Responsibility, which surveyed 25,000 consumers in 23 countries, nearly half of respondents said that social responsibility is the most important factor influencing individual impressions of companies. Two in three citizens want companies to go beyond their historical role in making a profit, paying taxes, employing people and obeying laws – they want companies to contribute to society.