June 30, 2009

Midway through 2009, global banks can expect to experience further losses, which are now emanating from the more predictable loan portfolios. To date, most losses have been concentrated in the larger banks' securities portfolios, specifically as these relate to trading assets. Financial institutions face a barrage of challenges to their business and financial profiles.

Widespread asset-quality deterioration, greater capital demands, lower earnings, increased regulation, extreme market volatility, and recessionary conditions. Structural changes are also transforming the industry on a fundamental level.Standard & Poor's Ratings Services has recently adjusted many of our ratings and outlooks across North America, Europe, and Asia to reflect this new era of risk and reward.