CPI inflation is the year-on-year percent houses) risk premia are calculated based on the assumption of change in the CPI-U. a very long-term risk-free nominal interest rate and a very longterm growth rate of payouts. The term premium (10 year bonds) is calculated based on an affine term-structure model (Kim and Wright, 2005).
As a result, analyst forecasts of bank profitability for 2020 have undergone large downward revisions in recent months, mainly driven by expectations that banks need to increase their provisions for future credit losses.