Dear SAP Banking community members.
Last week I had the opportunity of preparing a Capital Management presentation for the SAP North America Infodays.
It was an interesting discussion so I thought it could be a good idea sharing some ideas with you.
We all know that liquidity is a basic requirement for economic growth and consequently saving money (in a current account or cash), without investing or spending, seems to be bad.
But what can be the incentives for accumulating money without getting any satisfaction or return?
We save money because we don’t have enough incentives to consume the products offered in the market or we don’t believe on the promised returns of current investment opportunities.
But saving money also fulfills a very important function in the economy.
If we don’t consume, we’re incentivizing companies to produce better products and services which fits better our interests (from some perspective lack of sales feeds innovation).
And why not investing? How this can be good for the economy?
Let’s imagine that prices of houses are rising fast and we think that they cannot grow forever, so we will not consider buying a house a good investment and we’ll not buy. If the majority of potential investors see that, they will save and not invest preventing a bubble.
Since the starting of the crisis all the efforts have gone in the direction of increasing consumption, but in my opinion we will not overpass it without recovering the confidence of the market (investors and consumers), but trust requires transparency.
On the other hand, transparency requires reliable information and this is what SAP Banking is about.
By the way, in August 2009, just after arriving to Canada I heard in TV a very nice paradox.
American people have to consume more for recovering the economy.
…and at the same time
American people have to increase their savings for the future.
Intriguing, isn’t it?
Looking forward to read your opinions.
Kindest Regards.
Ferran.
Last week I had the opportunity of preparing a Capital Management presentation for the SAP North America Infodays.
It was an interesting discussion so I thought it could be a good idea sharing some ideas with you.
We all know that liquidity is a basic requirement for economic growth and consequently saving money (in a current account or cash), without investing or spending, seems to be bad.
But what can be the incentives for accumulating money without getting any satisfaction or return?
We save money because we don’t have enough incentives to consume the products offered in the market or we don’t believe on the promised returns of current investment opportunities.
But saving money also fulfills a very important function in the economy.
If we don’t consume, we’re incentivizing companies to produce better products and services which fits better our interests (from some perspective lack of sales feeds innovation).
And why not investing? How this can be good for the economy?
Let’s imagine that prices of houses are rising fast and we think that they cannot grow forever, so we will not consider buying a house a good investment and we’ll not buy. If the majority of potential investors see that, they will save and not invest preventing a bubble.
Since the starting of the crisis all the efforts have gone in the direction of increasing consumption, but in my opinion we will not overpass it without recovering the confidence of the market (investors and consumers), but trust requires transparency.
On the other hand, transparency requires reliable information and this is what SAP Banking is about.
By the way, in August 2009, just after arriving to Canada I heard in TV a very nice paradox.
American people have to consume more for recovering the economy.
…and at the same time
American people have to increase their savings for the future.
Intriguing, isn’t it?
Looking forward to read your opinions.
Kindest Regards.
Ferran.
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