A new survey released by credit scoring company FICO shows that almost eight out of 10 European-based managers believe Europe will plunge back into recession.
Mike Gordon, managing director of EMEA at FICO , told CNBC that most of the credit managers interviewed for the survey "seem to see the market getting worse, even talking about more recessionary like activities."
"This is the fourth report we have done and it seems to be getting worse,” Gordon said in an interview on Squawk Box Europe.
He said that the economies struggle because of the austerity measures and regulations that force banks to focus on raising capital.
One of the goals of the European Central Bank'slong-term refinancing operations (LTROs) — loans to banks at the record-low rate of 1 percent — is to get banks to extend credit to the wider economy, but Gordon said this was unlikely to increase in the next six months.
Not all areas of Europe are causing managers to worry and some actually give them hope, according to the survey. Some places in the United Kingdomshow signs of improvement, said Gordon, who added however that the government needs to get capital into the marketplace.
“The banks right now, because of the regulatory impacts, are keeping much more capital, so they have aligned their risk management schemes with capital closer,” Gordon says. “The government has to look at opening up opportunities for the banks to lend further.”
Gordon says that this recession is not going to be a shallow one. “It won’t be shallow, but it won’t be deep either. It’ll be somewhat moderate,” Gordon says adding that the recession may last “a long time.”
