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June 20 (The following statement was released by the rating agency)
In its first London event, Fitch's The Why? Forum brought together a distinguished panel of experts yesterday evening to discuss why there are signs of a return to growth in Europe.
Fitch's CEO, Paul Taylor, was joined by Lord Mervyn King, Former Governor, Bank of England; Stephanie Flanders, Chief Market Strategist, UK and Europe, J.P. Morgan Asset Management; Nouriel Roubini, Chairman, Roubini Global Economics and Steven Swartz, President and CEO, Hearst Corporation. The panel session was moderated by James McCormack, Fitch's Global Head of Sovereign Ratings.
Lord King's keynote address set the tone for an engaging panel session which covered topics such as Europe's economic outlook, its political backdrop and business environment, as well as the risks ahead for the global economy.
Despite a diverse range of views, panellists agreed that the recovery ahead for Europe would be slow and anaemic.
Below follows highlight quotes from the event, which was held at The Tower of London.
Paul Taylor, CEO, Fitch Ratings:
"Credits markets have grown more complex and investors are looking for more of the why, rather than just the what. The why forum is our platform to help strengthen understanding in capital markets and our credit ratings are an important source of information for the market when assessing credit risk." Stephanie Flanders, Chief Market Strategist, UK and Europe, J.P. Morgan Asset Management:
"The biggest risk is the political economy of the Eurozone and will the economic recovery now come through fast enough for people in Europe. Whilst the currency is now secure the question is whether the recovery will be too."
"Political risk in the UK is now much bigger than the economic risk, and it is not just the question of Scottish independence. The prospects for a hung parliament next year that isn't as strong a coalition as that we saw five years ago is not something that people are pricing in. Plus you have the Euro and EU referendums on top of that."
Nouriel Roubini, Chairman, Roubini Global Economics:
"On the surface things have improved and the mood is positive about the Eurozone. However potential growth is slow, the actual recovery is anaemic and debt ratios are rising, and the region still faces long term competitiveness issues."
"People are willing to tighten their belts if they can see light at the end of the tunnel from austerity with the creation of jobs, incomes and investment." Dr Roubini also said he expects to see the ECB introduce quantitative easing later this year.
Steven Swartz, President and CEO, Hearst Corporation:
"US companies are sitting on a massive amount of cash. Things are getting better, the acquisition market is heating up and despite all the difficulties facing the world economy it is very difficult to buy assets at attractive prices right now."
Conceived as part of Fitch's 100th anniversary in 2013, The Why? Forum is an interactive web and event platform, where leading thinkers from Fitch and beyond share insights about important themes at play in global markets and the economy. It examines 'why we think what we think' about global economic, demographic and geopolitical trends, increasing understanding of our world. Find out more at: www.thewhyforum.com.
Yesterday's event follows the inaugural The Why? Forum launch in New York last October, which featured a keynote address from Niall Ferguson, author and Laurence A. Tisch Professor of History at Harvard; as well as guest panellists Henry A. Kissinger, Former U.S. Secretary of State; and Former U.S. Secretaries of Defense William S. Cohen and Robert Gates.