Professionals foresee no improvement in capital markets

Photo credit: <a href="">Stuart Miles</a> Photo credit: Stuart Miles

Most investment professionals worldwide believe that the level of integrity of global capital markets in 2013 will be on par with that of 2012, according to a new survey.

CFA Institute, a global association of investment professionals that sets standards for professional excellence and credentials, published this finding in a new survey of its 115,000 members in 138 countries and territories. Six percent (6,783) of the members responded to the survey.

Of the total polled, two-thirds (67 percent) of CFA members globally say the integrity of global capital markets in 2013 will be about the same as in 2012. This compares with 26 percent of members worldwide who believe the integrity of capital markets will improve, and 7 percent who say it will worsen.

When asked which factors have contributed most to the current lack of trust in the finance industry, most CFA members cite “lack of ethical culture within financial firms” (56 percent), “poor governance” (16 percent) and “market disruptions” (16 percent). Only 2 percent of members don’t think there is a lack of trust in the finance industry.

To improve investor trust and market integrity, CFA Institute members recommend improved enforcement of existing laws and regulations (24 percent), improved corporate governance (21%), improved regulation and oversight of global systemic risk (19 percent), improved market trading rules on transparency and frequency of trades (16 percent), improved transparency of financial reporting and other corporate disclosures (16 percent) and improved auditing practice and standards (4 percent)

Four in 10 (40 percent) of the CFA Institute’s members say they expect the global economy to expand in 2013. Among U.S. respondents, 39 percent believe so.

Fewer CFA members expect the global economy to “stay roughly the same” (38 percent global and Americas) or contract (20 percent global and 22 percent Americas).

The percentage of CFA members who expect the global economy to expand is higher this year than in 2012, when just over a third (34 percent) pointed to an expansion.

When asked how they expect their domestic economies to perform in 2013, nearly half (49 percent) of U.S. respondents say they expect the economy to expand. Smaller percentages of U.S. respondents believe the domestic economy will stay about the same (37 percent) or contract (12 percent).

The survey finds that only CFA Institute members residing in Brazil (87 percent), the United Arab Emirates (73 percent), India (69 percent), Russia (54 percent) and South Africa (54 percent) have larger majorities of respondents who believe that an expansion of their domestic economies is forthcoming.

On average, 45 percent of CFA respondents believe their local economies will expand in 2013. By comparison, 38 percent believe their local economies will stay roughly the same; and 16 percent point to a contraction.

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