The world’s economic, financial, and geopolitical risks are shifting. Some risks now have a lower probability – even if they are not fully extinguished. Others are becoming more likely and important.

A year or two ago, six main risks stood at center stage:

• A eurozone breakup (including a Greek exit and loss of access to capital markets for Italy and/or Spain).
• A fiscal crisis in the United States (owing to further political fights over the debt ceiling and another government shutdown).
• A public-debt crisis in Japan (as the combination of recession, deflation, and high deficits drove up the debt/GDP ratio).
• Deflation in many advanced economies.
• War between Israel and Iran over alleged Iranian nuclear proliferation.
• A wider breakdown of regional order in the Middle East.

These risks have now been reduced.

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