...Our latest Risk Radar report identified eurozone deflation as the largest risk to our credit ratings portfolio, despite the ECB's quantitative easing programme. Approximately one-third of our global corporate finance ratings are based in the region and as the world's second-largest economy, largest importer and largest source of cross- border bank lending, deflation and weakness in the eurozone will have knock-on effects on other regions. In addition, key risks for 2015 for EMEA corporates include slowing emerging-market growth, elevated geopolitical risk and a strong US dollar. Widespread financial distress in emerging markets is however unlikely as an improvement in credit fundamentals over the last decade should make emerging markets more resilient than in the past. Nevertheless, corporate credits with greater funding needs will be vulnerable. The outlook for European high yield (EHY) bonds and loans may be impacted by the re-emergence of 2007- style trade and capital imbalances between...
