US-Iran escalation can impact negatively on GCC investors
DUBAI, July 8 -- Tensions between the U.S. and Iran have increased, but S&P Global Ratings has not changed any bank or sovereign ratings or outlooks in the Gulf Cooperation Council (GCC).
In a Credit FAQ titled "A Sharp Increase in Geopolitical Risk Could See GCC Banks Require Sovereign Support," S&P answer investors' questions on how the agency view the situation from a credit perspective and present some bank-funding-related hypothetical stress test scenarios.
These hypothetical tests show that GCC banking systems should be able to absorb substantial foreign funding outflows without government support in a modest stress scenario. However, in a more severe stress scenario, S&P see potential funding gaps emerging in all banking systems ...
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