By mid-September, corporate profits growth and default rates had already deteriorated rapidly. As financing conditions have tightened significantly, even some of the largest corporations have reported shortages of cash. As shown in Chart 6, the rest of the world has remained the only positive contributor sustaining corporate profit growth in the US.
Thus, subsidiaries sometimes have to reduce their local exposures, even though these exposures are also financed locally. 2  BIS Review 95/2006  •  International banks are also increasingly inclined to adopt matrix reporting arrangements by which local treasurers, comptrollers, and risk managers report directly to their parent bank’s counterparts rather than to the local CEOs.