In addition to a global escalation of risk, there are three broad
areas of geopolitical risk in Russia / Ukraine, MENA and Asia
Global: Material rise in global geopolitical risk
• Escalation of conflicts across multiple regions, driving
up oil prices and hampering trade and global growth
• Geopolitical tensions escalate into trade wars or
sanctions, also curbing trade and global growth
• Tail risk event, e.g., nuclear or large scale terrorist
attack, pandemics (e.g., SARS), natural disaster
• Further escalation in Middle East or North Africa
potential hotspots which could see further
instability, leading to disruption in oil production and a
rise in oil prices, and threatening global growth
• Could take the form of
- Regional spill-over of sectarian conflicts in Syria / Iraq
- Further escalation from Israel / Palestine tensions
- Israel / Iran escalation
-Rise in unrest in Egypt
- Islamist threat in North Africa / Nigeria
- Political upheaval in Saudi Arabia or other major
regional power
Deutsche Bank
Research
Russia / Ukraine: Escalation
of crisis
• Despite conciliatory signals
from Ukraine government and
from Russia, an escalation can't
be ruled out
• A downside scenario could see
a deepening of the conflict —
with US and EU introducing
level 3 sanctions (trade and
financial sanctions), and Russia
freezing Western assets
Asian latent disputes escalate into economic or
military conflict
• Intra-regional territorial disputes (e.g., China vs.
Japan / South Korea / Vietnam) escalate
• North Korea collapses, or triggers military attacks
on neighbouring countries
• Rising tensions between India and Pakistan (both
nuclear powers)
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