CFOs on both sides of the Atlantic are taking a gloomier view ofthe outlook for the global economy and their own companies,according to the latest quarterly survey from Financial ExecutivesInternational and the Zicklin School of Business at BaruchCollege.

When asked to rank their level of optimism about the globaleconomy on a scale from 0 to 100, the median response from U.S.CFOs was 44.1 in the second quarter, down from 51.9 in the firstquarter. European CFOs' optimism dropped even more, to 43.2 from54. CFOs' views on the global economy were the lowest since thesurvey began asking this question in 2010.

U.S. CFOs had a rosier view of the financial prospect of theirown companies, with the median ranking at 67.8, down from 70.8 inthe first quarter. European CFOs had a median reading of 54.5 ontheir company outlook, vs. 58.3.

Although U.S. CFOs expect cost increases, they also predictincreases in revenue and net earnings in the year ahead, whileEuropean CFOs anticipate increases in costs and revenue without anincrease in net earnings.

Optimism about the fate of the European Union, however, ishigher in Europe than in the U.S. A third of CFOs in both regionsexpect the European Union to maintain its status quo over the nextsix months. A little more than 20% of U.S. CFOs believe the E.U.will face dissolution within a year, while 20% expect a recovery.European CFOs are slightly more upbeat, with 42% expectingconsolidation in the next year and 29% expecting recovery.

This summer's financial sector scandals have not had a graveimpact on CFOs' confidence in their banking partners: 75% of U.S.CFOs and 52% of European CFOs say the scandals have not changedtheir perception of their principal banking partner. But 39% ofU.S. respondents reported having less confidence in the ability ofregulators to protect the financial system in the future. Whileonly 15% of European CFOs displayed confidence in risk controls andrisk management processes, 86% of U.S. CFOs reported beingconfident about them.