1. 2 0 0 8 The Credit Crunch and its impact on Banking Relationships 21 October, 2008

4. Corporate Bond Spreads only match those of 2002/2003 while FI spreads exceed them, highlighting how difficulties in the Financial System will extend the current difficult environment

5. Responsible for Current Market Turmoil in the United States Government Institutions and Regulators* (471) The U.S. Federal Reserve/Central Bank (341) * U.S. Congress, U.S. Securities and Exchange Commission and U.S. Treasury Department Note: Based off responses from 900 respondents globally Consumers (303) Accounting Regulations (266) The Housing Construction Industry (100) Investment Banks (555) Mortgage Underwriters (533) Rating Agencies (533) Hedge Funds (226) Sellers of Credit Default Industry (203) Nobody is Responsible (5) Other (103)

7. Entity that Inspires Most Confidence in Addressing Current Market Turmoil Note: Based off responses from 882 respondents globally

8. Level of confidence in the U.S. Federal Reserve’s $700 Billion Bailout Plan Note: Based off responses from 901 respondents globally Europe Asia Pacific North America Latin America

9. Short Selling of Financial Services Firms Note: Based off responses from 868 respondents globally Do you think short selling of financial services firms should be allowed? Asset Managers Corporates Pensions

10. A clear majority of companies expect their economies to deteriorate over the next six months, with a positive turn not until 12-18 months out. Expected Length of Time Before Positive Economic Turn 6 Months 2 Years 18 Months 12 Months Note: Based on interviews with 100 U.S. companies in February, and 291 U.S. companies in September of 2008. Longer than 2 years U.S. Companies – September 2008

11. Expected Length of Time Before Positive Economic Turn Latin America (13) North America (492) Note: Based off responses from 889 respondents globally Global (889) Asia Pacific (84) Europe (310)

12. Amount of Time Before Equity Markets Hit Bottom Latin America (13) North America (490) Note: Based off responses from 897 respondents globally Global (887) Asia Pacific (84) Europe (310)

13. Note: Based on interviews with 291 companies in the United States in September 2008. The strongest increase in demand for financial products is for hedging products and funding products . Companies’ expected change in need for funding shows only relatively modest shifts, with expected increases and decreases nearly netting to zero. Need for funding for ongoing operations is up, while need for funding capital expenditures or acquisition finance is flat to down slightly. Expected Change in Need for Funding (% of Companies) Funding for Ongoing Operations Funding for Capital Expenditures Acquisition Finance Structured Finance Hedging Products Increase/Increase Significantly Decrease/Decrease Significantly

14. The need to find funding for operations increased considerably in the past 6 months…… Feb. 2008 Sept. 2008

15. …… .but the ability to access sources of funding in the last 6 months has declined dramatically……..

16. Note: Based on interviews with 242 companies in the United States in September 2008. … ..and funding costs are increasing across the product spectrum

17. Half of all companies see the merging of Investment Banks into Corporate Bank parents as a positive development Do you have a positive or negative view of the impact of large mergers/acquisitions between commercial and investment banks (i.e. Bank of America / Merrill Lynch and JPMorgan / Bear Stearns) on the final markets?

18. More than half of all companies expected another major bank to fail before the dramatic government interventions of the past 2 weeks

19. In judging your banks, solidity, consistency and management skill trump relationship management and “basic banking” skills – for now

20. The Short View: Credit squeeze outlook Lending officers said they were continuing to tighten standards, whether on credit cards, prime mortgages, consumer or business loans, even though a strong majority of banks had done this in the second quarter. That implies a squeeze on consumption, and lower investment, as the year goes on. Polling lenders in the eurozone, seemed a little less gloomy, but only on the surface. There were slight decreases in the proportion of banks planning to tighten standards for corporate loans. Furthermore, lending officers said demand for company loans was decreasing and economic risks were putting pressure on them to tighten. In Europe and the US, the cost of insuring against default for investment-grade companies has risen but stayed well below recent highs, while the default risk for high-yield or lower-quality credits has shot up, almost regaining its highs. Spreads payable on speculative-grade credits are at their highest in four months. Financial Times PUBLISHED: AUGUST 14 2008

21. Tightening of Credit Standards is expected to continue in the USA and Europe Note: Third quarter values are expected Source: ECB and FRB Quarterly Lending Conditions surveys

22. Both in Europe and the US banks expect loan demand to weaken, but in the US more than before and in Europe less than before Note: Third quarter values are expected Source: ECB and FRB Quarterly Lending Conditions surveys

24. 70% of Investors Expect a Recession in the United States February 2008 Limited borrowing capacity for corporates Recession in the United States Global economic downturn Note: Based on responses from 234 global institutions. Total Institutions Asia (ex Japan) Europe North America None of the above

25. Performance of CDOs and Structured Credit Products has Made more than One Half of Investors Reluctant to Invest in them February 2008 Note: Based on responses from 221 global institutions. Asia (ex Japan) Europe North America Has the performance of CDOs/ structured products made you less likely to invest in these products in the future?

26. But a Meaningful Minority Plan to Invest in Illiquid Instruments February 2008 Asset-backed commercial paper Agency securities High-yield credit bonds Mortgage-backed securities Note: Based on responses from 128 global institutions. Asset-backed securities Commercial mortgage-backed securities High-yield CDS Distressed debt Leveraged loans Emerging markets bonds Covered bonds Collateralized debt obligations Which illiquid instruments did you or do you plan to invest in? Did you or do you plan to invest in illiquid instruments due to the turmoil in the credit markets?

27. Systemic and Counterparty Risk Have Become Bigger Concerns February 2008 United States (Q1 2007) Europe (Q2 2007) Global (Q3 2007) Note: Asked of 1,007 U.S. investors from 2/12 – 4/12/07; asked of 1,106 European investors from 5/21 – 7/27/07; asked globally of 251 fixed-income and equity derivative investors from 8/30 – 9/7/07 and 214 from 1/22-2/6/08. Systemic/market risk Credit/default risk Liquidity Counterparty risk Global (Q1 2008) Proportion of Investors Citing Each Factor as a Top Risk

28. Return expectations for cash investment have declined in the United States following declining interest rates and more conservative portfolio allocations. Note: Based on responses from 95 companies in the United States, 99 in Europe, and 66 in Asia from February 2008 and 678 in the United States from April through June 2007, 100 in Europe and 174 in Asia from August through November 2007. United States Europe Asia February 2008 February 2008 February 2008 October 2007 October 2007 May 2007 Target Annual Return on Cash Investments

29. U.S. companies are shifting more cash investment into higher-rated securities. Note: Based on responses from 65 companies the United States from February 2008 and 617 from April through June 2007. AAA/Aaa AA/Aa No Ratings/Other February 2008 May 2007 A/A BBB/Baa BB/BA or below Cash Portfolio Allocation US companies

30. European companies have shifted cash investments toward lower-rated/higher-yielding securities. Note: Based on responses from 53 companies in Europe from February 2008 and 110 from August through November 2006. AAA/Aaa AA/Aa No Ratings/Other February 2008 October 2007 A/A BBB/Baa BB/BA or below Cash Portfolio Allocation European companies

31. Similar to U.S. companies, Asian firms have moved toward higher-rated securities for cash investments. Note: Based on responses from 36 companies in Asia from February 2008 and 247 from August through November 2006. AAA/Aaa AA/Aa No Ratings/Other A/A BBB/Baa BB/BA or below February 2008 October 2007 Cash Portfolio Allocation Asian companies

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