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Crisis Sentiment Index Improves by 5 Points in December; Still More than 40 Points Away from Normal Conditions, But Some Positive Signs Emerging

Fri, 04 Jan 2013 13:16:34 GMT

The Crisis Sentiment Index (CSI) is a regular assessment of the status of the financial/economic crisis around the world by senior executives and board members who are involved in risk governance. Reported on a scale of 0 to 100, a reading of 75 indicates “normal conditions.”

For December 2012, the Crisis Sentiment Index (CSI) improved five points to a reading of 34. This is approximately the same level at which the index stood in June 2009. At the same time is also the second highest reading since June 2011. Overall sentiment remains very cautious, but the first hints of some optimism were revealed, particularly as it relates to the potential for the U.S. economy to accelerate. Caution regarding event risk remains high.

All CSI sub-indices improved again this quarter. CSI-Credit increased back to a reading of 52, its second highest since the survey began in 2008. This sub-index maintains its place as the most positive of the sub-indices. Even at that level, though, CSI-Credit is nearly 25 points away from “normal conditions.” CSI-Banks was the most improved sub-index, moving up by seven points to a reading of 31, while CSI-Insurance improved by six points to a reading of 38, making it the second best of the sub-indices.

In our featured questions this quarter, we ask for respondents’ expectations regarding the direction that the economies of various countries and regions are likely to take. There is some hope revealed in this data. Still, a clear concentration of very low expectations, combined with one negative assessment that our respondents presciently brought forward six months ago, temper all assessments. Details on this question, each sub-index, and specific insights from respondents are contained in the full report. Should you have any questions, please don’t hesitate to contact me.

All past reports are available on the CSI home page.