“Rich, retired and gone”
“Every time we have a recession I sit down with the head of workout for bank clients and ask what banks are going to learn,” said Hood, who first qualified as an accountant in 1970.
“Absolutely nothing” was their response when asked during the last recession in the early 1990s, Hood said.
“Within three years, they said, there will be high loan to value (ratios) on commercial property, covenants will be loosened and lo and behold it happened … the odds are against any learning,” he said.
He explained: “What happens is when the cycle turns, everybody’s gone — they are rich, retired and gone.”
To make things worse, Hood told the summit, there is a global shortage of turnaround specialists.