EY Eurozone Forecast: Summer 2012

Outlook for financial services

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Welcome to the Summer edition of the EY Eurozone Forecast: Outlook for financial services.

With key national elections in France and Greece, as well as a banking bailout in Spain, much has happened since our Spring forecast. But in the judgment of the financial markets nothing has changed. Even the return of a pro-bailout government in Greece last month barely moved the dial. Similarly, the €100 billion bailout of Spain’s banks in June prompted only a short rally. After two years of turmoil, it seems that global investors are frustrated with short-term quick fixes and are looking for a more fundamental solution to the sovereign debt crisis.

Uncertain Eurozone economic outlook continues to impact the financial services sector.

What do Eurozone developments mean for your financial services organization and the wider industry? Read our Summer 2012 forecast to find out more, or contact us for in depth insight on the issues affecting your organization.

Outlook for financial services – key highlights Summer 2012

  • Outlook for Eurozone non-performing loans has worsened for 2013, rising to 6.5% of total loans
  • Eurozone banks expected to shrink balance sheets by €1.6 trillion in 2012
  • Historically low interest rates mean that the Eurozone life insurance industry has a gap to plug between investment returns and higher return guarantees
  • 50% of what is invested in the Eurozone in the next 20 years is likely to go into pensions

We hope you find the forecast interesting and thought provoking.

Andy Baldwin-Eurozone Andy Baldwin
Head of Financial Services, Europe, Middle East, India and Africa