Systemic risk in global financial markets remains relatively contained, according to a new report from Moody’s Investor Services Inc.

Although certain systemic risks such as asset price and market liquidity risks have increased recently, overall systemic risks look to be relatively subdued, according to the credit-rating agency. None of the six systemic risks that it monitors are currently assessed at higher than ‘medium.’

Exchange-rate risk has declined, Moody’s says, “as political uncertainty has faded, notably in Europe following recent elections.” Policy uncertainty has receded as well, it notes, although liquidity has tightened in euro area government bond markets.

The banking sector’s fundamentals also continue to improve, Moody’s says, noting that troubled loans “have bottomed out in most regions” and that banks are seeing their profitability and efficiency improve. Moreover, countries with weak banking systems, such as Russia and Brazil, are less exposed to risks of asset bubbles, it says.

Asset price risks are greatest in countries such as Switzerland and Norway that also have some of the strongest banking systems, based on Moody’s stress testing.

“Financial conditions in global markets are more favourable than a year ago and are likely to remain so as global growth picks up and banking sector fundamentals remain stable,” says Colin Ellis, managing director credit strategy at Moody’s, in a statement.

“That said, there are potential downside risks from event-related volatility in financial markets tied to elevated asset prices, and banking sectors in Latin America and the Commonwealth of Independent States look relatively vulnerable,” he adds.

Moody’s notes that global economic activity has improved this year and that it expects the G20 economies to grow at an annual rate of slightly more than 3% in 2017 and 2018, up from 2.6% in 2016.