Credit risks to the banking system
The recovery in global activity has continued but downside risks have increased, in particular from weak fiscal positions in some euro-area economies. While UK banks' direct exposures to the most vulnerable sovereigns and their banks are limited, they are exposed to the private sectors in those economies and indirectly through their links to other banking systems.
The creditworthiness of larger companies in most advanced economies has improved, but commercial real estate remains a concern, including in Asia where signs of overheating have emerged. Loan forbearance may be masking underlying risks from continued high levels of indebtedness in parts of the corporate and household sectors in the United Kingdom and overseas.
Financial Stability Report
Volume and page numbers
29 , 17 -28