Investors Who Manage $7.2 Trillion Worth Of Assets Reveal What They Think Will Happen To Europe

Fitch surveyed 100 respondents that represent $7.2 trillion of fixed income assets, on their concerns about the eurozone. Here’s what they found on chances of a double-dip recession and a eurozone break-up:

  • 80 per cent said the risk of a double dip recession is high, up from 68 per cent in the last survey. 
  • 53 per cent think “fundamental conditions for banks will deteriorate”.
  • 82 per cent think banks will need another long-term refinancing operation (LTRO) within the next two years.
  • 5 per cent think the eurozone will break up, while 33 per cent think it will move towards a fiscal union.
  • 9 per cent think there will be multiple sovereign debt defaults but do not expect it to cause a break-up.
  • 21 per cent think Greece and one or two other countries could exit the union.

This chart shows what respondents think are the biggest risks to the European credit markets:

chart

Photo: Fitch Ratings

Note:  73% of respondents were credit portfolio decision makers on the buy side in western Europe, being either senior bond department heads, portfolio managers, or heads of fixed-income research teams. 27% were senior credit analysts, strategists or credit risk managers.

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