Imminent Fiscal Decisions by Political Leaders Will Have Profound
Consequences on Capital Markets and Investment Portfolios,
according to BNY Mellon-Sponsored Report
NEW YORK,
Dec. 5, 2012 /PRNewswire/ -- The US and European economies
will face significant challenges in 2013 and beyond regardless of
the scope and direction of imminent fiscal decisions globally,
according to a new BNY Mellon-sponsored report from the Economist
Intelligence Unit (EIU). The report, Fiscal Decision Time for
Political Leaders, examines and details the diverse opinions of
leading market watchers and participants.
The report's key findings include:
- Experts are divided on whether government leaders will make the
tough fiscal decisions necessary to save their economies. In
spite of widespread pessimism, some experts believe US leaders
could come up with a "grand compromise" and European leaders could
move toward greater fiscal and regulatory union.
- Viewing the US "fiscal cliff" as a binary event distorts what's
likely to happen. Although the equity markets would likely
rebound if lawmakers achieved structural reform, experts agree that
the US is likely to experience a fiscal drag in any case.
- The European economy faces two major
uncertainties: Will European countries ever submit
themselves to outside fiscal control? Will the European Central
Bank cut off an ailing country from further support if it fails to
meet conditions for its loans, thus triggering the type of panic it
seeks to avoid?
"While the threat of a return to financial instability may
inspire politicians on both sides of the Atlantic to make the
difficult political and fiscal decisions that have been avoided for
years, our report details a significant divide of opinions on the
decisions that will actually be made and the impact of those
decisions," said James P. Palermo,
vice chairman and CEO of Global Client Management for BNY
Mellon.
The report is a byproduct of BNY Mellon-sponsored
Search for Growth research examining the prospects for
economic and market growth from the perspective of both
institutional investors and corporate executives. Based on a global
survey of almost 800 respondents carried out by the EIU in
January 2012, and a series of
in-depth interviews with leading investors and experts, the
research explores the potential for growth across a wide range of
sectors, regions and asset classes. It also explores the likelihood
and potential impact of a range of both positive and negative
scenarios.
Fiscal Decision Time for Political Leaders is
available at
http://www.bnymellon.com/foresight/pdf/eiu-fiscal-1212.pdf. More on
the Search for Growth research initiative is available at
http://www.bnymellon.com/foresight/searchforgrowth.html.
The Economist Intelligence Unit (EIU) is the world's
leading resource for economic and business research, forecasting
and analysis. It provides accurate and impartial intelligence for
companies, government agencies, financial institutions and academic
organisations around the globe, inspiring business leaders to act
with confidence since 1946. EIU products include its flagship
Country Reports service, providing political and economic analysis
for 195 countries, and a portfolio of subscription-based data and
forecasting services. The company also undertakes bespoke research
and analysis projects on individual markets and business sectors.
More information is available at www.eiu.com or follow us on
www.twitter.com/theeiu
The EIU is headquartered in London, UK, with offices in more than 40
cities and a network of some 650 country experts and analysts
worldwide. It operates independently as the business-to-business
arm of The Economist Group, the leading source of analysis on
international business and world affairs.
BNY Mellon is a global financial services company focused
on helping clients manage and service their financial assets,
operating in 36 countries and serving more than 100 markets. BNY
Mellon is a leading provider of financial services for
institutions, corporations and high-net-worth individuals, offering
superior investment management and investment services through a
worldwide client-focused team. It has $27.9 trillion in assets under custody and
administration and $1.4 trillion in
assets under management, services $11.6
trillion in outstanding debt and processes global payments
averaging $1.4 trillion per
day. BNY Mellon is the corporate brand of The Bank of New
York Mellon Corporation (NYSE: BK). Additional information is
available on www.bnymellon.com or follow us on Twitter
@BNYMellon.
SOURCE BNY Mellon