risks

Forest-based carbon markets offer significant opportunities for developing countries but require robust institutional frameworks, effective governance, and comprehensive policies to maximize benefits and mitigate risks.

A few days ago, Bank of Spain released its Financial Stability Report, one of its top publications. Coincidentally, this report came out on the same day Americans elected their new president.

This report presents an analysis of those global shocks, mostly of low probability, which may have a severe impact on the economy. Short-term risks have diminished on the back of easing trade tensions and interest rate cuts, but concerns on structural issues remain high (de-globalization and climate change).

Economic data and news this summer in Europe are disappointing; especially for the signs of vulnerability of the more open economies following the slight fall in production in Germany and the fading expectations that the main risks would diminish in the second half of the year.

This report presents an analysis of those global shocks, most of low probability, which may have severe effects on the economy. The balance of risks continues to be tilted to the downside due to trade tensions (impact on China) and increasing probability of recession in the US.

Tweaks to Fed balance sheet strategy and operational framework. Fed to reach terminal balance level in 2019. New principled approach not without risks.

This report analyzes the main global economic risk events that could generate a sizable deviation from our baseline scenario. Among them, a full-on trade war, US recession, Fed exit strategy and disorderly deleveraging in China stand out. Although these are usually events of low probability, their feasibility and adverse effects may be large enough to require monitoring.

On the backdrop of a solid growth in Q1, the China Vulnerability Sentiment Index broadly remained stable driven by SOE and Shadow banking Vunerability index, despite the new emerging risk of Sino-US trade tensions. However, Housing Bubble and Exchange Rate Vulnerability index deteriorated as property prices remained resilient as well as RMB's recent appreciation.