zeb/market flash (Issue 4 – January 2013)

Global economic climate

• Aside from the US, the global economy continues to slow down, as GDP growth rates and forecasts further decrease
• Economic outlook for Germany substantially reduced
• Italy may become main challenge for the euro in 2013 due to elections and highest refinancing needs

Key banking drivers

• Stock market volatilities back to pre-debt-crisis levels
• Historically low EURIBOR not reflected in lending/deposit rates
• Investment banking activities with solid recovery – corporate bond issuances outperform M&A activities and equity offerings

State of the banking industry

• Q4 strong quarter for banking industry outperforming all other industries – upward trend continues as market capitalization reached highest level in two years
• Outlook for 2013 mixed due to increased rating downgrades

Special topic: The impact of negative interest rates

• Negative interest rates pose several challenges for banks