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Moody's: Global banking outlook 2016; banks' financial strength to improve but pressures persist 

December 7, 2015


While banks in many countries have improved their capitalization and strengthened their balance sheets, risks -- including weakening asset quality in emerging markets -- could derail progress, according to Moody's Investors Service in its just-published report "Global Banking 2016 Outlook: Macro Challenges, Regulation Will Offset Improved Fundamentals."
"The prospects for banks in 2016 will continue to center around global growth and interest rates, the evolving regulatory environment and generally weak profitability, as well as regional considerations such as the implementation of the Banking Union in Europe," said Moody's Global Managing Director Greg Bauer.
Moody's expects to see European banks continue reducing the overhang of bad loans. At US banks, net charge-offs and early-stage delinquencies are expected to remain low for most asset classes. However, despite these improving credit trends, the stable outlook for banks globally could be threatened if economic growth falls short of projections or turns negative. Read more
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