SWIFT is the new barometer for global economic activity
Forget the Dow Jones' stock indexes, it is the Global SWIFT Index which is the new barometer for global economic growth.
Sibos Toronto 2011
Standards, interoperability, connectivity, mobile payments, the rapidly evolving post-trade landscape, cloud computing .... just some of the topics that are likely to dominate debate at this year's SIbos conference in Toronto. Of course Sibos this year is taking place against an uncertain economic backdrop with the US economy dealing with stagnant growth and high unemployment, and large US banks facing litigation for sales of mortgage-related securities dating back before the 2008 sub-prime crisis.
In Europe, a number of banks are also facing capital issues and possible credit downgrades due to their exposure to sovereign debt in countries such as Greece. The Sibos conference is taking place against the backdrop of a sovereign debt crisis that just won't go away and the spectre of regulation requiring banks to hold more capital on their balance sheet.
Before the first day of the conference has even begun, SWIFT has tried to steal the march on the economic uncertainty sweeping global markets by setting itself up as a barometer of economic activity. SWIFT maintains that the payment traffic carried over its network is a fairly good barometer of GDP or economic activity. It has developed a methodology for modelling and anticipating official GDP at global, regional and national levels. Called the Global SWIFT Index, it will be available from the first quarter next year and incorporates SWIFT traffic data.
Arguably the Sibos conference itself is a good barometer for the state of the financial services sector. All one needs to do is take a visual poll of the exhibition floor, see how many banks are exhibiting and how big their stands are, although this may not be a reliable indicator as banks always try to outdo one another when it comes to the size of their exhibition stand. More on that later.
Date Posted:19th September 2011