Lloyds chief economist advises accountants to beware

TREVOR WILLIAMS, Lloyds TSB Corporate chief economist, took to the stage at the financial reporting Meet the Experts conference, to tell participants what they already know – that the world economy is in a bad way.

Williams advised accountants to pay close attention to the costs of funding and liquidity trends, urging them to think about the timing of credit decisions and not to take their eye off default rates, even in economies with very low interest rates.

Despite the well-worn warning, his engaging patter and genuinely funny jokes have made delegates sit up.

The probability of Greek default in the next few years is "over 100%", he said. More surprisingly, the probability of Portuguese default is less than one-in-four, around one-in-ten for Ireland and even lower for Italy, at just over one-in-twenty.

His joke about the creative accountant asking his boss what answer he would like to hear, may have been old, but Williams managed to trip through the complexities of world recession and growth without losing any of his rapt audience.

Next up, a look at regulatory developments.