As such companies have business in both the industrial sector and financial sector, which involves banks, securities companies, trust companies and insurance companies, their capital operation is characterized by a financing chain of “Financing—M&A—Listing—Re-M&A— Re-financing”. Huge operational risks are hidden in the chain. Given that both ends are “financing”, financial institutions will become the biggest victim if the chain breaks.
However, the pace of expansion in the euro area eased off in the first half of the year compared with 2017.This is likely to be attributable to multiple factors: in particular, last year’s export growth was exceptionally high and therefore could probably not have been maintained; capacity utilisation is going up; and last but not least, the oil price hike is probably weighing on private consumption.