PwC has joined forces with the Centre for the Study of Financial Innovation (CSFI) to explore what risks bankers worldwide are facing in the current climate and how they prioritise them.
Every two years, PwC sponsors the Banking Banana Skins survey conducted by CSFI. Each survey identifies potential sources of risks to banks and then ranks them by severity. Also included are industry members' views about the risks they face, the soundness of financial markets, and other pressing issues.
This report describes the risk outlook for the banking industry in the final quarter of 2015 - a time when the global economy and its banking system were in the advanced stages of recovery from the financial crisis, but when concerns were growing about the strength of that recovery.
The findings are based on responses from more than 672 bankers, regulators and close observers of the banking scene in 52 countries. In the opinion of these respondents, the greatest threat to the banking industry lies in the possibility that economic recovery will fail because of the huge - and in many cases rising - weight of debt in all the main sectors: sovereign, corporate and consumer. There are also strong concerns about economic weakness in developing economies, and uncertainty surrounding central banks' monetary policies.
The main concern of respondents from Indonesia was also the macro-economic environment, and key drivers such as interest rate risk and currency. Credit risk was noted as a significant concern, as NPLs are growing and the economy is slowing.
Please see both the Global and Indonesia reports for specifics on how risks were ranked, the "anxiety" index for each country, and how respondents viewed the industry's level of preparedness to address those risks.
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