And as I just said, the banking sector is still dealing with the challenges posed by the quality of its legacy assets. Second, the current expansion of the US is now significantly longer than historical norms and the second longest in US modern history.
Looking ahead, a down-turn in the US macro-financial cycle could trigger a correction in markets in particular for riskier asset classes. Furthermore, tensions have grown in emerging market economies on the back of a stronger US dollar and increased trade frictions. These developments may undermine global growth prospects and ultimately lead to abrupt increases in risk premia.