On Friday, April 3rd, forty Corporate and Councilor members of the FACC gathered for a breakfast discussion with François David, Chairman of the Board, Coface. Coface, the premier global provider of trade-credit information and protection, assists players in the world of business and trade in their decision-making on exports and investment.

Serge Bellanger, President, French-American Chamber of Commerce, opened the meeting and provided remarks on Mr. David’s background and accomplishments.

Offering his analysis of today’s economic situation, Mr. David indicated that we are not facing the same scenario as during the 1929 economic depression. As a comparison, the 1929 GNP decreased 30%; in 2009, a decrease of 2% is expected.

Mr. David also pointed out that an economic crisis is cyclical, and suggested that every eight years, out of forty, a credit crisis arises. When GNP is high, consumers tend to spend in high volume and over-extend themselves, leading to a crisis. The cycle does come to an end, usually after a two-year period. 2008 and 2009 represent the end of this eight-year cycle, and 2010 should be a recovery year. Mr. David stated that world growth will result, but it will be lower than what we are used to: 2%-3%, not 5% or higher.

Turning to the role of U.S. rating agencies, particularly before and during the current crisis, Mr. David asked: “who rates the rating agencies?” When rating agencies are called in to review a company, he emphasized, they have no basis for their ratings and sometimes use last year’s balance sheets. The services of rating companies are also expensive. Finally, rating companies are protected by the First Amendment; if a mistake is made, they cannot be sued.

Coface uses balance sheets to support its analyses, and advocates for the creation of an independent body to provide quality control and responsibility. Coface has lobbied strongly for a new rating environment, arguing that an independent body is needed to assess rating agency credibility and reliability. Mr. David noted that the G20 recently agreed to push for such regulation.

Following remarks on the economic situation in such countries as China, India and Russia, Mr. David opened up the discussion to an engaging question and answer session.

The FACC thanks Coface for its generous sponsorship of the event.