In our view, the "leave" result in the U.K.'s June 2016 referendum on EU membership ("Brexit") has increased the risks of adverse economic developments in the U.K. As a result, we now see a negative trend for U.K. banking industry economic risk. We also believe that the U.K. economy has now entered into a correction phase, driven by our revised expectation that imbalances will worsen as credit growth slows and real house prices contract. However, we consider that banks' underwriting standards, low interest rates, and low unemployment should mitigate the extent of losses in the banking sector. We are therefore revising to negative from stable our outlook on the majority of U.K. domestic banks, as described below, while affirming their
