However, if the correction in the U.S. housing market intensifies or the effects of  2  BIS Review 132/2007  swings in financial markets become unexpectedly widespread, private consumption and business fixed investment may become weaker than expected due to the negative wealth effect, credit tightening, and deterioration in business and consumer sentiment, thereby leading to further deceleration in U.S. economic growth.
Although the European economy is likely to expand steadily, growth may slow depending on the effect of volatile global financial markets on financial conditions. If these risks related to the U.S. and European economies were to materialize, this may, depending on the extent, affect growth of other economies such as emerging economies, and this could cause global economic growth to be weaker than expected.