The Big Picture
From the uneven economic recovery to the acceleration of digitization and rising focus on social trends amid COVID-19, several key themes are shaping global credit conditions. We assess the impact on countries, regions and sectors.
  • SUMMARY
  • REPORTS
  • Webinars

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    Podcast
    19 Oct 2021|Moody's Investors Service
    Chief Credit Officer Richard Cantor and Marie Diron, of the Sovereign team, discuss how the pandemic crisis has accelerated the increase in government debt levels globally and what it means for the broader economy

    SECTOR IN-DEPTH
    29 Sep 2021|Moody's Investors Service
    COVID-19 has led to a significant increase in government debt levels. Although most sovereigns will return to pre-crisis levels by the middle of the decade, assuming economic and financial conditions normalize gradually, some will struggle given structural deficits or weak growth potential.  ​​​
    SECTOR IN-DEPTH
    27 Sep 2021|Moody's Investors Service
    Emerging market bond markets, as measured by percentage of GDP, have grown 3x times faster on average than mature bond markets.

    SECTOR IN-DEPTH
    22 Jun 2021|Moody's Investors Service
    Only 40% of non-investment-grade sovereigns will see a decline in their debt burdens in 2022 compared to 2020. Debt ratios will remain at historical highs through 2022 for most, due to limited revenue-generation capacity, weaker growth dynamics and greater spending pressures.
    SECTOR IN-DEPTH
    07 Jun 2021|Moody's Investors Service
    Global debt rose by $32 trillion in 2020, led by government and nonfinancial corporate debt, and will continue to rise in 2021. Despite an uptick in defaults, policy support prevented a debt crisis in emerging markets, but the pandemic and its aftermath will challenge their debt-servicing capacity.

    Uneven Recovery
    SECTOR PROFILE
    19 Oct 2021|Moody's Investors Service
    The pace of sovereign rating actions has slowed significantly in 2021 and actions year-to-date have been more benign. This reflects, in part, the lifting of temporary lockdowns and resumption of economic activity in many countries.
    DATA REPORT
    11 Oct 2021|Moody's Investors Service

    Only three Moody’s-rated corporate issuers defaulted in September. The speculative-grade global corporate default rate fell to 2.6% for the trailing 12 months and will likely stabilize at 1.5%-1.7% in the first half of 2022, underpinned by our expectation that the economic recovery will continue and funding conditions will remain accommodative.


    Podcast
    06 Oct 2021|Moody's Investors Service
    Peter Nerby, Olivier Panis and Shunsaku Sato explain how global systemically important banks are faring as the pandemic starts to recede. Dean Ungar discusses the implications for US health insurers should the Medicare hospital insurance trust fund run out of money. And David Yin tells us how a recent cryptocurrency ban in China is positive for financial institutions.​​​​
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    Social Trends
    SECTOR IN-DEPTH
    20 Oct 2021|Moody's Investors Service
    China’s plan to achieve economic sustainability by addressing income inequality and social risks will have far-reaching effects for many types of debt issuers. A lack of predictability and clear communication around policy implementation are the key near-term risks, while potential long-term benefits include improved productivity and social stability.
    SECTOR IN-DEPTH
    22 Jul 2021|Moody's Investors Service
    The pandemic’s uneven effects on European labour markets and savings will influence consumer spending patterns, the availability of credit to individuals and the direction of government regulation throughout the region.

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    PODCAST
    29 Sep 2021|Moody's Investors Service
    Samar Maziad of the Sovereign team discusses the cost effectiveness and advantages of social safety nets when responding to shocks. Plus, Jennifer Wong of the Sub-Sovereign team explains why emerging market regional and local governments face particularly high social risks.
    Digital Transformation
    SECTOR IN-DEPTH
    14 Sep 2021|Moody's Investors Service
    As the world increasingly turns digital, competitive challenges to financial institutions are growing. We identify four main forces that could dislodge banks from their dominant roles as financial intermediaries. They are Big Tech, pureplay fintechs, “stateless” finance and central bank digital currencies.
    SECTOR IN-DEPTH
    19 Aug 2021|Moody's Investors Service

    The People’s Bank of China is testing a digital version of the renminbi. If adopted on a widespread basis, the e-CNY, as it would be called, has the potential to strengthen banks' role in the e-payment system while also increasing competition for technology companies.


    PODCAST
    22 Sep 2021|Moody's Investors Service

    Stephen Tu, Melina Skouridou and Farooq Khan explain how four forces reshaping finance will likely reduce banks’ revenue from core activities and undermine their role as financial intermediaries. Plus, Alka Anbarasu explains why India’s banks will weather the stress from a COVID-19 resurgence, and Jasper Cooper gives an update on insured hurricane losses in the US.

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    Environmental Impact
    SECTOR IN-DEPTH
    19 Oct 2021|Moody's Investors Service
    Latin American companies in many sectors with high carbon transition risk are adopting mitigation and adaptation measures independent of national-level policies on reducing emissions. For many policymakers across the region, government mandates aimed at achieving carbon neutrality will likely continue to rank lower in priority to promoting economic growth.
    SECTOR IN-DEPTH
    15 Sep 2021|Moody's Investors Service
    Water management risks tied to supply and quality issues, as well as risks amplified by climate change, are creating credit challenges across Asia. Sectors such as mining, agriculture, textiles, semiconductors, and hydroelectric and thermal power depend on good water management. For sovereigns, water stress and poor sanitation can weaken the growth outlook, add to fiscal costs and increase social tensions.

    PODCAST
    02 Jun 2021|Moody's Investors Service
    Alberto Postigo and Alka Anbarasu discuss the threat of climate change to banks’ asset quality. Plus, Megan Fox and Steve Tu talk about the effects on banks and asset managers of the Biden administration’s new executive order on climate-related financial risk, and Sid Ghosh tells us whether businesses around the world can get insurance coverage for disrupted operations during the pandemic.
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    Policy Challenges
    SECTOR IN-DEPTH
    14 Oct 2021|Moody's Investors Service
    The global minimum corporate tax rate will be mildly credit negative for sovereigns that have used tax policy as a key component of a broader competitiveness strategy to attract investment, such as Ireland, Hungary and many Caribbean countries, which typically have corporate tax rates below 15%.
    SECTOR IN-DEPTH
    05 Oct 2021|Moody's Investors Service
    If the US debt limit is not increased or suspended by 18 October, the US government would need to prioritize between debt-service and other payments, raising the possibility of a technical default. Despite ongoing political polarization and debt limit brinkmanship in the US Congress, we believe the debt limit will be raised in time to avoid a missed interest payment.

    Podcast
    13 Oct 2021|Moody's Investors Service
    Gary Lau of the Corporate Finance team and Michael Taylor of the Credit Strategy & Research team discuss China Evergrande’s financial troubles and the credit implications for China’s property market, banks, government and potential spillovers to the global economy.
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    Rising Debt Burdens
    SECTOR IN-DEPTH
    27 Sep 2021|Moody's Investors Service
    Bond markets in emerging market countries, as measured by percentage of GDP, have grown three times faster on average than have mature bond markets, reaching 80% of GDP in 2020 from 15% in 2000. Domestic bond markets are much larger than international bond markets and are expanding alongside bank lending, rather than replacing it.
    SECTOR IN-DEPTH
    07 Jun 2021|Moody's Investors Service
    Global debt rose by $32 trillion in 2020 and will continue to climb this year. The COVID-19 pandemic and its aftermath will challenge debt-servicing capacity in emerging markets. Advanced economies have more fiscal space, but will encounter debt sustainability challenges related to productivity and demographics.

    VIDEO
    VIDEO
    05 Mar 2021|Moody's Investors Service
    Marie Diron of the Sovereign team discusses our launch of scores measuring exposure to and credit effect from environmental, social and governance factors. She highlights that, while exposure to environmental and especially social risk often combines with weak governance and limited financial capacity to have an overall negative credit effect on sovereigns, circumstances vary widely.