Global Crisis Monitor Week 2: A Survey Digest Highlighting the Impact of COVID-19 on Treasury

Here, the measurements are done on a scale of 1-9, with 1 being a major deterioration, a 9 suggesting a strong improvement, and 5 being neutral, meaning almost no change.

• The scale of impact of COVID-19 on companies over the past week has shown an improvement suggesting companies have started implementing resolutions to alleviate the impacts of the global pandemic
• The organizational and country response to the situation is still positive, meaning more countries and companies have started taking active steps and measures to ease off any repercussions
• The level of concern of impact on community & family of employees largely remains the same

The graph represents the level of concern with regard to the availability of liquidity of an organization. The scale shows the ratio of more concerned versus less concerned, meaning a 2 on the negative side represents 2:1 ratio for more concerned versus less concerned, while a 4 on the positive side means for every organization that is more concerned, 4 organizations are less concerned.

• The most concerning aspect is still the accounts receivable where the number of organizations that are more concerned is six times higher than the number of organizations that are less concerned
• The central banks providing liquidity remains the least concerning of the lot since more organizations are happier at the changes in provisions for central banks
• The fiscal policy shows some level of concern as governments are struggling to keep up with the impacts of COVID-19
• The Bank Line of Credit sees a switch from being a slightly concerning aspect to less concerning one
• Commercial paper issuance and covenant requirements show far lesser levels of concerns than last week, possibly due to the release of a cash crunch caused by lesser liquidity in the previous week

This graph illustrates the time organizations expect normalcy to arrive.

A breakdown of the graph represents the following:

• The expected point when the impact of the virus begins to diminish is mostly seen within a duration of one month. This figure has reduced by a week from last week’s results, meaning the time period remains almost the same
• The end of health issues is expected somewhere around a couple of weeks into five months from now. The number has increased by about 2 weeks owing to the wider spread of COVID-19 in the past week
• The financial normalcy indicator shows most organizations believe it to be in the bracket of 4-9 months period from now. This timeline has also increased by a few weeks from the past results may be because companies predict the impact to last longer than previously expected

This graph counts the level of optimism for an economic recovery to occur. Here, different color bands show the outlook to be either positive, negative, or neutral, each reflecting the percentage of these responses.

• Almost 80% of organizations do not see an economic recovery within a period of 3 months, while the figure changes to around 35% for a period of 12 months.
• Only 13.5% expect a recovery to show up in 3 months, while almost half believe the same to happen within a year.

• The Staff Safety Protocols topped the list of concerns for the 2nd week in a row. This means the health and welfare of employees remains the top concern for organizations
• Access to Adequate Liquidity moved up a position over last week and now sits at number 2. This shows increasing levels of concern as more liquidity is needed by organizations since forecasted impacts on Accounts Receivable is likely the key factor
• Direct Financial Impact on the Business now sits at the third-highest concern as attention is shifting away from BCP completeness given most companies have had a significant number of staff working remotely for at least two weeks at this point

We’ll continue to monitor and report on how the changing dynamics of COVID-19 impacts Treasury and Finance professionals, including the way we work to mitigate the risks.

Insights: Key survey findings of Week 1- March 18-24

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