Moody’s Investors Service forecasts a negative outlook for banks in 2024, citing sluggish global growth, increased loan default risks, and profitability pressures. The credit agency’s latest report points to deteriorating asset quality due to prior central bank rate hikes and rising unemployment in advanced economies, with real estate exposures in the U.S. and Europe presenting significant risks. Furthermore, the Asia-Pacific property markets are expected to face ongoing stress. Banks have shown mixed results this year, with consumer revenues benefiting from higher central bank rates countering inflation, while investment banking suffers from a slump in deal making. Tight monetary conditions in 2024 are anticipated to hinder economic growth, with China facing a slowdown due to reduced consumer and business spending, weak exports, and property sector challenges.
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