...

Moody's: Europe becoming more vulnerable to economic crises

Europe Materials 2 October 2018 16:29 (UTC +04:00)
Europe is not ready for another major downturn affecting the financial system.
Moody's: Europe becoming more vulnerable to economic crises

Baku, Azerbaijan, Oct. 2

By Ilkin Shafiyev - Trend:

Although European banks have strengthened their balance figures since the last economic crisis, and companies benefit from soft credit conditions, Europe is not ready for another major downturn affecting the financial system, the Moody's rating agency wrote in its review, RIA Novosti reported October 2.

The experts of the agency believe that the measures taken by the authorities and the European Central Bank (ECB) to help restore the economy after the last recession, have limited the options available to them for countering the next economic crisis.

"Despite some improvements since 2008, Europe remains economically vulnerable as the debt burden increases, the region has fewer tools to support economic recovery, asset prices rise, political and regulatory risks increase, and innovative technologies affect more sectors. In general, we see that it reduces the room for maneuver to mitigate a new attack," said the Senior Vice President of Moody's agency Paolo Leschiutta.

The agency points out that the debt of individuals or corporations has remained at historically high levels over the past decade, resulting in increased risks for many issuers in the event of a sharp rise in interest rates.

The high level of public debt in many countries also implies exposure to the risk of economic recession. In addition, high asset prices mean that they may undergo a sudden correction if interest rates rise rapidly and exceed market expectations.

Moody's adds that rapid technological change also puts pressure on a number of sectors and creates new sources of competition.

"The industries with large volumes of personal data are at the greatest risk of large-scale data theft and serious damage to reputation and finances," the agency concluded.

Tags:
Latest

Latest