2013Q1 Reports: Treasurer

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Treasurer's Report to ACL Executive for year ended 2012-12-31 Interim report, April 2013

Graeme Hirst, Treasurer

(1) This is an interim report, as the books for 2012 are not yet completed. There are two reasons for this.

(a) The PCO's account for the ACL conference in Jeju in July 2012 was not received until late November 2012. Ordinarily, had it been received in a more timely manner, our bookkeeper, Chiaki Nemoto, would have been working on it during the quieter parts of the late summer and fall; instead it arrived close to the year-end, just as things start to get busy for her with many of her clients.

(b) Chiaki has been out of action, or slowed down, for several weeks recently due to two eye operations. She is now back at work and starting to up with the backlog. She is aiming (but not promising) to have our 2012 books complete by the end of May.

(2) Nonetheless, I can give the following preliminary information; (b) and (c) are based on some interim figures that Chiaki has computed.

(a) The EACL 2012 conference in Avignon made a surplus of €2850 on gross revenue of €159,300 -- a razor-thin margin.

(b) The NAACL 2012 conference in Montreal appears to have made a marginal loss of about $1700 on gross revenue of $312,000. [These are preliminary figures; they may change!!] However, this figure does not take into account our application to the Canadian government, presently in process, for a rebate under the Foreign Convention and Tour Incentive Program (FCTIP), which, if successful, will refund 50% of the federal and provincial taxes paid on catering at the conference and 100% of the taxes paid on AV -- a total of CAD 18,800 (about US$18,300 at recent rates).

(c) Early indications are that ACL 2012 and EMNLP 2012 in Jeju will collectively record a surplus, but the figures are so preliminary that this cannot be assured. Costs have not yet been allocated between ACL and EMNLP, and while it appears that the total income of both exceeds the total expenses, I cannot yet rule out the possibility that some income has been double-counted. Also, even if the events collectively have a surplus, it does not follow that each has done so individually.

(d) Two independently-located SIG-sponsored events, INLG-2012 and SIGDIAL-2012, each made a comfortable surplus for its SIG.

(3) The safety of our European assets:

About half of the ACL's assets (€268,000 as of 2013-03-31) are held in euros in investments and accounts in Malta, where they are overseen by the EACL Treasurer, Mike Rosner. (But they are nonetheless ACL's assets, not EACL's; EACL's relatively small subaccount is contained therein.) The recent bank failure in Cyprus, with partial confiscation of large deposits to help pay for a bail-out, has understandably made people nervous about the safety of bank deposits and other investments in other small eurozone nations on islands in the Mediterranean.

Obviously, the government of Malta is concerned about this perception, and asserts that Malta is not at risk. Mike Rosner writes: "Obviously, anything can happen, but I have seen several articles in the press claiming that the case of Malta is quite unlike that of Cyprus (see quoted article below). More significant is that the results a recent study on imbalances commissioned by the EU (published April 2013) did not find that Malta had any significant imbalance and praised the Maltese Central bank and the Maltese banking system for its prudent approach."

The Times of Malta, 2013-03-27 -------------

Central Bank Governor Josef Bonnici has dismissed as “misleading” any comparison between Malta’s banking system and that of Cyprus.

He said the size of the Maltese banking sector relative to GDP was strongly influenced by institutions that virtually had no economic or financial links with the economy. He insisted that assets of the all-important banks amounted to “just below 300 per cent” of GDP, which was within normal limits.

Unlike Malta’s core banks, the large Cypriot banks were also very active internationally with a high dependence on foreign sources of funds and high exposure to losses on foreign assets.

“The problems facing Cypriot banks included losses made on their holdings of Greek bonds, whereas Maltese domestic banks have limited exposure to securities issued by the programme countries,” he said.

end of quotation from TOM -------------------

Mike groups our Maltese assets into four risk groups as follows (where 0 is the lowest risk):

0. Insured current bank deposits €52,000* 0. Guaranteed bank term deposits €76,000* 1. Government bonds €20,000 2. Bank bonds €15,400 3. Company bonds €104,700

  • Jointly covered up to €100,000.

It should be understood that category 3 is not a high risk in absolute terms. Mike notes that "all these companies are 'gilt-edged' in local terms -- well established and backed as well as being economically successful. They are generally felt to be pretty safe provided they are held to redemption. There is not much of a market for buying and selling them mid-term."

Nonetheless, as they mature we should consider diversifying our bond investments into other economies. The maturity dates cover the period from 2014 to 2020.

As context for the above discussion, it should be noted that the other half of our assets (just on $300,000 as of 2013-03-31) is held in U.S. dollar bank deposits in the United States. In 2008, that country, like Cyprus, also suffered a number of failures of banks and other investment houses, including the bank in which our deposits were held, Wachovia Bank. Fortunately, no deposits were lost when this bank was merged with another, Wells Fargo, which now holds our accounts.