Weekly Blog by Philip King, CEO of the ICM - 'Consistency, fairness and madness'

It is always interesting to see what comes out of the EU and compare ourselves with our fellow 'Europeans'. I was particularly intrigued, therefore, by a recent article in The Guardian http://bit.ly/i5tB9H that highlighted how the Irish are undertaking what they call 'bankruptcy tourism' - in short, taking advantage of the bankruptcy process in the UK as a better way out for entrepreneurs crushed by debt from the property boom.

Waiting 12 months to be declared bankrupt and start again is a considerably more attractive proposition than waiting the likely 12 years in Ireland, and so it set me thinking: isn't it about time that the EU looked more actively into bankruptcy and insolvency across Europe and introduced a modicum of consistency and uniformity among Member states? I am sure it would be well received, especially by creditors.

And while we are talking about the EU, I was similarly intrigued and bemused by The European Court of Justice ruling on sex equality in insurance that will mean that insurance companies are not going to be able to price according to the calculated risk of those wishing to be insured.

I share the frustration of parents who have seen their sons penalised by excessive insurance charges because they fall into the high risk young male driver bracket, but the pricing of insurance and premium rates are based on calculated odds. If we stop this, then what next?

If it is unfair to use claims experience to price insurance, then isn't it also unfair to use credit scoring models predicated on calculated experience? What an interesting conundrum that would be.

I may be becoming too old and cynical but the absence of common sense from EU decisions, of which the above are just two recent examples, drives me to despair!

Weekly Blog by Philip King, CEO of the ICM - 'One economist agrees with me!'

An SME 'Access to Finance Research Report' published recently by the Institute of Chartered Accountants in England & Wales (ICAEW) held little in the way of surprises either in its findings or its recommendations. But it was nonetheless interesting.

One of the recommendations that particularly struck a chord with me, for example, was that 'SMEs need to display good financial management'. This is especially pertinent given the work that the Institute of Credit Management has been doing as part of the Doing Business Together initiative http://www.doingbusinesstogether.org/ and the need for greater transparency and clarity from all sides.

Whilst the report suggested that banks needed to do more to improve their relationship with the SME sector, it also concluded: '...well-managed, viable businesses with good track records have been able to obtain the finance they require........'. Such a statement will come as no surprise to those banks supplying the finance or credit professionals providing the trade credit!

I spent one afternoon this week with Roger Martin-Fagg, an economist, listening to his outlook for 2011 and beyond. Roger talks a great deal of sense and can support his arguments well. I was particularly pleased to find an economist who agrees with me that we're going to see a real surge in corporate insolvencies in the months ahead. I've been starting to feel I'm in a minority of one recently but perhaps not, after all!

His views on the difference between 'demand-pull' and 'cost-push' inflation are interesting too; we've got the latter in the UK and - for that reason - raising interest rates alone will not solve the problem. We watch with interest to see what happens next.

Feedback, positive or negative always welcome - use the response form or e-mail me at ceo@icm.org.uk.

Weekly Blog by Philip King, CEO of the ICM - Spot the stars

It has been a busy week that started with the inaugural meeting of the Small Business Economic Forum formed by the new Small Business Minister Mark Prisk. The forum brought together banks and business representatives, among them the Institute of Credit Management, with a remit to 'share their views with Ministers on enterprise issues, in particular economic issues facing small firms'.

What we learned from the first forum is that there is a continuing divide between banks' and business organisations' perceptions as regards to what extent the banks are lending. That, in itself, was not a surprise, but perhaps more of a surprise was the lack of any sign of a solution. In short, it is an issue that is unlikely to go away.

Whether the forum will be successful or not, I do not know. We can only do our best to ensure that it is. Certainly Mr Prisk is of the view that the forum should produce actions, not just words, and that is encouraging. It was good to be invited and welcomed by the new Coalition, and a good opportunity to share views across a wide spectrum of organisations. It was encouraging too to see the engagement of the Business Secretary Vince Cable who joined the meeting in the latter stages to lend his support. http://bit.ly/c3umbH

As I write, I have just finished listening to the statement by George Osborne regarding the Comprehensive Spending Review (CSR). It was a good, if rare, opportunity to listen to a whole speech. It went on for more than an hour and it was hard to get too much detail and that is a pity, for it is in the detail that the devil will be.

Little he said was totally unexpected: 490,000 predicted public sector job losses were in line with predictions, and the impact of people losing jobs, or jobs left vacant, and people entering the market as self-employed will be huge. My worry - and one that I expressed at the Equifax/RBS Exchange Day in London, is that too many start-ups fail to get the basics right. Too many of them are trying to sell the wrong product, or are in the wrong place, or both, and the cuts will produce a large number of people who think they can use their redundancy cheque as a means to fulfill a long-held dream. Sadly, for many, the dream will turn into a nightmare and credit professionals are going to have the challenge of spotting the stars and avoiding the dangers.

For more information about the Institute of Credit Management visit http://www.icm.org.uk/ or follow ICM on Twitter http://www.twitter.com/icmorg.