A visit to New Zealand is a step back to a time before the pandemic, when large crowds still congregated at events. New Zealand has been amongst the most successful in beating back COVID-19 and is bearing financial fruits with its enviable, relatively positive economic performance. But a strong recovery is not guaranteed for the country—which, while an island, depends on the rest of the world for its prosperity.
For the world’s economy, 2021 hasn’t yet brought a break from 2020; COVID-19 remains dominant. Although all banking systems are vulnerable to upheaval, the situations for those in emerging markets are more tenuous for several reasons. S&P Global Ratings examined the three major risks facing a sample of 15 EM countries, including likely deterioration in asset quality, geopolitical and domestic policy uncertainty and vulnerability to abrupt changes in investor sentiment.
Mergers and acquisitions are often a good solution for ailing banks and have been tossed around more frequently lately as the answer for Europe’s financial institutions, many of which are struggling with internal issues along with external factors such as anemic growth and low interest rates. While consolidation brings many benefits, it may not be the best remedy for European banks right now, especially when it involves substantial cross-border deals.