...April 23, 2020 - Despite governments' measures to contain the COVID-19 pandemic, European economies, including Germany, face an unprecedented challenge. - We continue to expect the German government's wide-ranging fiscal and related monetary measures to substantially mitigate this extraordinarily sharp, cyclical shock to the economy, and so also support the banking system in its key role as a conduit of fiscal and monetary support. - Even under our base case of an economic recovery starting in third-quarter 2020, we expect bank earnings, asset quality, and in some cases, capitalization, to weaken meaningfully through year-end 2020 and into 2021. - Our negative rating actions reflect these factors and our view that downside risks remain substantial. That said, we continue to see differentiated implications for banks in the system. - We could take further negative rating actions if we expect the cyclical economic recovery to be substantially weaker or delayed, as this would imply a far more...
