EU banks’ reporting on fully phased-in standardised RWAs under CRR3 following Basel III finalisation shows significant variation in CET1 ratio impacts: from zero to 367bp. We expect banks will have time to adjust.

Scope Ratings calls for comments on its Sub-Sovereigns Rating Methodology by 1 September 2025. The proposed update refines Scope’s analytical approach. No rating changes are expected as a result of this update.

The Portuguese government’s payment of a pension bonus this year and multiyear corporate tax cuts will not reverse the declining public debt trajectory, but diminished fiscal leeway leaves less room for manoeuvre in case of future shocks.

Italian banks face relatively low asset-quality risks from new US tariffs, although second-round effects could impact profitability.

Transatlantic trade tensions are contributing to a moderate deceleration in near-term economic growth in the European Union and euro area by around 0.4pps, even in a baseline scenario of the United States and the EU reaching a preliminary trade agreement.

European bank earnings will remain resilient in 2025, although we expect net interest margins to shrink. Given the low visibility around the impact of trade wars and geopolitics and the uncertain economic environment, risks remain skewed to the downside.

China is confronting several daunting challenges: persistent deflation, historically low interest rates, structurally declining economic growth and rising levels of government debt. This raises significant obstacles for economic stability.

The government’s commitment to fiscal discipline is challenged by a rising interest burden, an economic slowdown and a fragmented and uncertain political environment weighing on the country’s fiscal and reform outlook.

Higher mortgage rates have increased pressure on housing affordability. Longer fixed-rate mortgages periods limit the risk of shocks to the banking system and support the resilience of euro-area mortgage markets.

Germany’s ambitious defence and infrastructure borrowing plans will lead to a marked increase in its deficit and debt-to-GDP. Sustaining fiscal space over the long term will depend on associated growth effects but also pension and labour market reforms.