3  Japan and Italy are therefore frontrunners in facing the economic and institutional adjustments demanded by this demographic transition, which is unprecedented and has far-reaching implications in terms of productivity growth, the balance between saving and investment, pension requirements and long-term care. There are clear implications here for public finances and asset markets.
Economic outlook and banking sector’s performance Keeping in mind the impact of real sector shocks on financial stability, any assessment of the banking sector needs to be done in the backdrop of national as well as international economic outlook. During the last couple of years, global growth has been above the forecast in almost every region stimulated by strong monetary and fiscal measures.