Carola Schuler from the European Banking team discusses the factors behind our negative sector outlook, with weakening economic prospects across most of the region set to result in deteriorating loan quality and profitability. In particular, the deteriorating business climate for banks in the euro area’s larger economies, such as the UK and Germany.
Dominic Simpson from the Insurance team explains how a changing product mix, relatively conservative investment portfolios and solid regulatory capital can offset the effects of low interest rates on both profitability and economic solvency.
Orlie Prince and Nicole Serrano from the US local government team discuss how most of the country’s 25 biggest cities are adequately prepared for a recession after using the 10-year economic expansion since the last downturn to strengthen their finances while curbing rises in leverage and fixed costs.