FRANKFURT, Nov 27 (Reuters): Euro zone shares would suffer more than their US counterparts in the event of a full-blown global trade war but emerging markets would likely take an even bigger hit, research published by the European Central Bank (ECB) suggested on Tuesday.
Trade tensions have risen this year as the United States imposed a plethora of protectionist measures, mostly tariffs on China, raising the risk of an escalation that could exacerbate an already notable slowdown in worldwide trade.
"US equity prices would fall by about 10 per cent and US corporate bond spreads would increase by up to 100 basis points in the first year," in an all-out trade war, the ECB said, describing that scenario as 25 per cent import tariffs imposed by all countries on each other.
"In the euro area, equity prices would fall by 15 per cent and corporate bond spreads would increase by 150 basis point in the first year," the ECB added in a chapter of its Financial Stability Review.
European shares would suffer more in a global trade war: ECB
FE Team | Published: November 27, 2018 23:39:01
European shares would suffer more in a global trade war: ECB
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