I mminent Fiscal Decisions by Political L eaders Will Have Profound Consequen c es on Capital
Markets an d I n v estm en t Portfolios, ac c ordin g to BNY Mellon -Spon sored Report
Ec o no mist I nte llige nc e Unit re po rt inc lude s asse ssme nts b y le ading e c o no mists, inv e sto rs and fina nc ie rs
NEW Y ORK, December 5 , 2012 - The US and European economies will face significant c hallenges in 2013 and beyond regardless o f the scope and direction o f imminent fiscal decisions glo bally , ac c o rding to a new BNY Mello n-sponsored report from the Economist I ntelligence Unit (EIU). The repo rt,Fisc al De c isio n Time fo r Po litical Le aders, examines and details the diverse o pinions o f leading market watc hers and partic ipants.
The repo rt's key findings inc lude:
Ex perts are divided o n whether government leaders will make the tough fiscal decisions nec essary to sav e their economies. I n spite of widespread pessimism, some experts believe US leaders could c o me up with a "grand compromise" and European leaders could move toward greater fiscal and regulato r y unio n.
V iewing the US "fiscal cliff" as a binary event distorts what's likely to happen. A ltho ugh the equity markets would likely rebound if lawmakers achieved structural reform, ex perts agree that the US is likely to ex perienc e a fisc al drag in any c ase.
The European ec o no my fac es two majo r unc ertainties: Will Euro pean c o untries ev er submit themselves to o utside fiscal control? Will the European Central Bank c ut o ff an ailing c o untry fro m further support if it fails to meet c onditions for its loans, thus triggering the ty pe o f panic it seeks to av o id?
"While the threat o f a return to financial instability may inspire po litic ians o n bo th sides o f the A tlantic to make the difficult political and fiscal decisions that have been avoided fo r years, our report details a significant div ide o f o pinions o n the decisions that will actually be made and the impact o f those decisions," said James P. Palermo , v ic e c hairman and CEO o f Glo bal Client Management fo r BNY Mello n.
The report is a byproduct o f BNY Mellon-sponsored Search fo r Growth research examining the pro spec ts fo r ec onomic and market growth from the perspective o f both institutional investors and c o rpo rate ex ec utiv es. Based o n a global survey o f almost 800 respondents c arried out by the EI U in January 2012, and a series o f in- depth interviews with leading investors and experts, the research explores the po tential fo r gro wth ac ro ss a wide range o f sectors, regions and asset c lasses. It also explores the likelihood and potential impact o f a ran ge o f bo th po sitiv e and negativ e sc enario s.
1212.pdf. Mo re o n the Se arc h fo r Gro w th researc h initiativ e is av ailable athttp:/ / www.b ny me llo n.c o m/ fo r e sight/ se ar c hfo r gr o wth.html.
The Ec o nomist I ntelligence Unit (EI U) is the world's leading resource fo r e c o no mic and business researc h, fo recasting and analysis. It provides accurate and impartial intelligence for companies, government agenc ies, financial institutions and academic o rganisations around the glo be, inspiring business leaders to ac t with c o nfidence since 1946. EI U products include its flagship Co untry Repo rts serv ic e, pro v iding po litic al and ec onomic analysis fo r 195 c ountries, and a portfolio o f subscription -based data and fo recasting serv ic es. The c o mpany also undertakes bespoke research and analysis projects o n individual markets and business sec to rs.
Mo re info rmatio n is av ailable at www.eiu.c o m o r fo llo w us o n www.twitter.c o m/ theeiu
The EI U is headquartered in London, UK, with o ffic es in mo re than 40 c ities and a netwo rk o f so me 65 0 c o untry experts and analysts worldwide. I t o perates independently as the business -to -business arm o f The Ec o no mist Gro up, the leading so urc e o f analy sis o n internatio nal business and wo rld affairs.
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