New York, USA, Dec. 4 (EFE).- Moody’s Investors Service, a credit rating agency, released a report on Monday saying that its “outlook for global banks for 2024 is negative” due to the fact that “central banks’ tighter monetary policies have resulted in lower GDP growth.”
“Reduced liquidity and strained repayment capacity will squeeze loan quality, leading to greater asset risks,” the report said.
In the United States, some of the largest banks will build capital “because of regulatory changes.”
But China’s economic growth will slow next year due to subdued private spending, weak exports and an ongoing correction in the real estate market.
And in Europe, falling real estate values will lead to more “problem loans”, although the agency noted that banks are well capitalized and the credit quality of their commercial real estate loan portfolios is “strong.”
“Banks inSweden are the most exposed because of very high CRE concentrations and a deeperdownturn in the local property market,” the report added.
Globally, Moody’s warned that the military conflict between Israel and Hamas could still negatively affect credit conditions through oil prices and a heightened sense of risk in the market. EFE