The risk of another recession and a renewed banking crisis is at the top of banking executives’ minds, according to survey results released this morning.
The Centre for the Study of Financial Innovation (CSFI)’s Banking Banana Skins survey, produced in association with PwC, puts macro-economic risk at the top of the list of 30 possible risks to banks.
“While Canada may be better prepared to handle some of these risks, the issues are intertwined with the global banking system,” said John MacKinlay, national leader of PwC Canada’s Financial Services Consulting practice.
“Everyone is concerned about contagion from more troubled economies, [in] particular in the U.S. and Europe,” he added.
Most of the top risks identified by Canadian respondents were in line with those in the global ranking: macro-economic risk, funding issues and regulation.
Globally, the poll shows that anxiety about the outlook for banks is at its highest level since the survey was started 13 years ago, with many respondents expecting to see further bank failures and nationalizations. The main cause of the anxiety is the eurozone crisis and its threat of sovereign default by several countries.
Bankers in Canada, the U.S., China, Argentina and Australia put the euro crisis at the top of their list of concerns.
For the first time, the Banana Skins survey shows the risk outlook to be better in the emerging economies than in the industrialized world. Respondents from Latin America, Africa and the Far East ranked their prospects more positively than North America and Europe, thanks to stronger growth.
Jenny Wagler
@JennyWagler_BIV