Continuation of a large negative output gap in the major economies  Aside from the short-term downside risks I have mentioned, there is concern over the medium to long term: it could take time before the U.S. and European economies, as well as  BIS central bankers’ speeches  3  the Chinese economy, overcome the aftereffects of the credit bubble.
While support by the monetary and fiscal authorities has expanded during this time, tensions have spread even to Italy and Spain, and thus risks associated with the European sovereign debt problem seem to be on the rise. Concern from now on is the spillover of the European sovereign debt problem to the financial/banking sector and economic activity.