Macroeconomic and credit trends point to a widening gap in credit risks across regions and industries in the year to come. Downgrades have slowed but negative outlooks are at unprecedented highs for both nonfinancial corporates (37%) and banks (30%) globally. As a result, we forecast the speculative-grade corporate default rate to double by June 2021. Banks can absorb the shock generally, but recovery will be slow and uneven.