4 Dec 2012 05:09pm

The Global Finance 50

The world’s financial system experienced a shock in 2008 from which it hasn’t fully recovered. When it does, the world will be a different place. But in this new financial world order, who will be the major influencers? This is the question the inaugural economia Global Finance 50 seeks to answer. Included on this list are the people playing a part in the economic and financial lives of millions, whose daily decisions and actions influence the performance of the global economy and who in 2013 will make a major difference. These are the names we think will shape the finances of the world…

1. Angela Merkel
German chancellor

She may not be the most surprising choice for the person we think will have the greatest impact and influence on the financial community during 2013, but this will be another huge year for the German chancellor. With the eurozone crisis in some sort of temporary remission (but still a long way from a sustainable recovery), 2013 is an election year in Germany.

Incumbent leaders have generally not fared well in elections since the global financial crisis. Merkel faces extra pressure as perhaps the European leader with the most political capital invested in the future of the euro.

In the eyes of eurosceptic domestic opponents she has given up German wealth and power in order to bail out Greece and other ailing eurozone economies. This is countered by the positive political benefits of keeping these economies alive enough to prop up the currency and prevent any further dramatic financial collapse.

How this all plays with German voters remains to be seen. Her government may not be popular, but Merkel herself continues to bask in personal ratings of over 65%.

She will have to square the circle of proving to domestic voters that she is tough on these economies, without alienating politicians in those countries. It is to Merkel that non-European world leaders turn to as the de facto leader of Europe. That effectively puts her in charge of 300 million people and a budget of $17trn. She isn’t universally popular among EU leaders and is a famously tough negotiator. Nevertheless, she has the ability to present her actions as being in Germany’s best interest, while also able to present a deal as being for the benefit of the whole EU. A canny operator, it’s more than likely that she will emerge from the elections even stronger.

2. Xi Jinping
Chinese leader

Despite the reports of a slowdown in the Chinese “miracle”, a growth rate of 7% puts China in a stronger economic position than most other world economies. The country’s newly minted leader has the country’s economy at the top of his busy in-tray when he assumes control. With the euro likely to continue its wobbles, the Chinese renminbi will increasingly be seen as one of the world’s major currencies.

Xi is likely to continue the policy of combining a more liberal, open economy at home with the sort of financial imperialism that has seen China invest heavily in other developing economies, particularly in Africa. The population is now in excess of 1.3bn with a GDP of $7.3trn (it only reached $1trn in 1998). Xi Jinping will therefore influence much of the world’s economic activity.

Behind these statistics is the nuanced story of an expanding financially independent middle class. Each day sees China’s middle class expand by 25 million consumers. While this could be an opportunity for luxury goods firms, there is also increasing demand for homemade luxury goods to serve this new market.

3. Barack Obama
President of the United States of America

After one of the hardest fought US elections for a long time, Washington has returned to business as before, almost. Obama’s second-term in-tray doesn’t look much easier to deal with than that of four years ago. Without question the major financial issue he faces is securing agreement on the US budget and avoiding the automatic raising of taxes and spending cuts that will tip the US over the fiscal cliff.

This alone is enough to earn Mr Obama such a high place on our list. The US budget is a long-term problem about to come to a painful head if Obama can’t get a bi-partisan solution to fix it. Last October’s G20 meeting in Mexico made it clear that should he fail it would not only put the brakes on the nascent US recovery, but could potentially tip the entire global economy back into recession. On the day he won the election, Obama spoke of having a renewed determination. He’ll need it. Struggling eurozone leaders

(Struggling eurozone leaders)

 It is easy to condemn having so many EU leaders at the top of the list as eurocentric. And it is a bit of a cheat to collect several names (this isn’t the last instance). But the shadow of failure hanging over the eurozone and the single currency project has had huge consequences in 2012 and the possibility remains of it continuing to drag down global economies next year, too. This is not a European crisis, but a global one. Along with the US, the danger of one of these countries failing remains the biggest risk to the global economy. An Oxfam report claims the fallout from the euro is having an impact on developing countries. So the leaders of Portugal, Italy, Ireland, Greece and Spain can’t afford to fail – for everyone’s sake.

5. Christine Lagarde 
Managing director, IMF

This hasn’t been the best year for the IMF, with developing countries (especially BRICs) pressing for more say on how it sets about its mission of preserving global stability. A recent Economist Intelligence Unit report showed how skewed it is compared to the pattern of world trade. The chief economist was forced to revise up predictions for the so-called “fiscal multiplier”, namely the impact austerity (which the IMF has hailed) has on growth.

Despite these difficulties, the IMF remains at the heart of global policy and with a budget of $360bn has the firepower to back that up, hence the significance of its interventions. The degree to which it steps back from promoting austerity will have a huge impact on the world

6. Jim Yong Kim
President of World Bank

A former Harvard Lecturer, community entrepreneur and president of Dartmouth College, Kim took on the top job at the World Bank with a mission to “deliver powerful results to support sustained growth, prioritise evidence-based solutions over ideology, and amplify the voices of developing countries”. A year on, things are going well. The World Bank is more needed than ever. It performs vital long-term capacity-building work in several developing economies (including ICAEW projects to train ACAs).

7. Michel Barnier
European commissioner for internal market regulations

Whenever accountants discuss the future of their profession, which they do ever more frequently, one name that always crops up is that of EU commissioner Michel Barnier. His reaction to the financial crisis was to criticise the “Anglo-Saxon model” of capitalism. He also took exception to the role auditors played (or didn’t) in the crisis. This will be a big year for his planned reforms, not to mention his other input to influential changes in banking and financial services.

8. Anthony Jenkins 
CEO, Barclays

The new boss of the world’s seventh largest bank has his work cut out. With total assets estimated at $2.4trn, its recent management shake-up, as a result of revelations of Libor-fixing, has seen it become a litmus paper for the industry. Replacing the brash, aggressive investment banker Bob Diamond with the supposedly mild-but-firm retail banker Jenkins is seen as part of the taming of the former Masters of the Universe and the start of the crawl back to respectability. For this alone, Jenkins will be in the limelight more than many other global banking bosses in the year ahead.

George Osborne

9. George Osborne
Chancellor of the Exchequer

By sticking so rigidly to Plan A, Osborne has become a global poster boy for austerity. The full impact of this approach has yet to be understood. A third-quarter bounce out of recession (thanks to one-off factors) would be undermined if things dip back next quarter, as many economists are predicting. Thus the impact of how the UK economy behaves will resonate and influence policy on a broader stage. Should the economy drop into triple-dip recession, Osborne might rethink. His conference speech was notable for not including the word growth. So will he know what to do?

10. Peter Oppenheimer
SVP and CFO, Apple

Currently the world’s largest company, there is potentially only one way for Apple to go, and that’s down. But analysts have been predicting this for a few years now and yet the company’s exponential rise continues. Under CEO Tim Cook, the company has survived the loss of founder and chief inspiration Steve Jobs. And the company has built up a formidable cashpile, most recently reported at $117bn. Having survived Cook’s recent senior management reshuffle, and despite being a money man in a company where the emphasis is often on its shiny, sexy new products, Oppenheimer remains a low-profile figure. But 2013 will be a pivotal year for the company. One of the main issues for Oppenheimer is how to use that $117bn cashpile.

Like any CFO sitting on a lot of cash, he will face myriad calls to use it. There will be pressure to do something more than simply continue its announced stock buyback progamme.