Fitch's 'Inside Credit' Looks at Scenarios with Greatest Risk to Global Ratings

NEW YORK--()--The latest edition of Fitch Ratings' 'Inside Credit' newsletter highlights the largest risks to the agency's credit ratings portfolio. A sharp slowdown in China's economy would have the greatest impact across a broad range of issuers, according to Fitch's Risk Radar.

Fitch's base case is for a gradual slowdown, but equity market volatility and yuan devaluation highlight the economic adjustment and deleveraging challenges China is facing.

"If China's GDP growth fell to 2% by end-2017, many emerging markets would face a more severe and prolonged slowdown," says Eileen Fahey, Chief Credit Officer. "A number of factors including recessions in Russia and Brazil, lower commodity prices, and a strong U.S. dollar make it a fairly urgent risk for emerging markets."

Other risks addressed in the Risk Radar include persistently low oil prices, U.S. interest rates, Eurozone deflation and zero growth, U.S. medium-term fiscal challenges and North American consumer capacity.

Other topics covered in this week's edition of Inside Credit include:

- Ukraine Downgraded to 'Restricted Default'

- EU Bank Resolution Paths Diverge, Coordination Important

- European Funds Face Shrinking Market Liquidity, Capacity Issues

- GSII Capital Rules Deter Insurers from Greater Complexity

- Higher-Rated Issuers Gain from Change in China's Offshore Debt Policy

- TPP Would Set Key Precedents for Global Integration

- Lower Russian Bank Capital Ratio Would Be Credit Negative

- Video: Fitch in Brazil

'Inside Credit' is a weekly snapshot of Fitch Ratings' noteworthy content, selected from all sectors and regions. To receive the weekly edition, distributed every Friday at 8am ET, please sign up here:

http://pages.fitchemail.fitchratings.com/InsideCreditSignUp/

Additional information is available at 'www.fitchratings.com'.

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Contacts

Fitch Ratings
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com

Contacts

Fitch Ratings
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com