319 Risks related to the global financial markets and general economic conditions Disruptions in global financial markets and general economic conditions have affected, continue to affect and may have  a materially adverse effect on Aegon’s businesses, results of operations, cash flows and financial condition. Aegon’s results of operations and financial condition may be materially affected from time to time by general economic conditions,  such as levels of employment, consumer lending or inflation in the countries in which we operate. Global financial markets have  experienced extreme and unprecedented volatility and disruption in recent years and uncertainty remains today. These developments  have created an unfavorable environment for banking activity generally. Bank lending has been lower than pre-financial crisis levels for  some time, and housing markets in Europe and North America remain under pressure. In addition to the risks described in this section, these conditions may result in reduced demand for Aegon’s products as well as  impairments and reductions in the value of the assets in Aegon’s general account, separate account, and company pension schemes,  among other assets. Aegon may also experience a higher incidence of claims and lapses or surrenders of policies. Aegon’s policyholders  may choose to defer or stop paying insurance premiums, which may impact Aegon’s businesses, results of operations, cash flows and  financial condition, and Aegon cannot predict definitively whether or when such actions may occur. In Europe, countries such as Greece, Ireland, Italy, Portugal, Spain and Cyprus have been particularly affected by financial and economic  conditions, creating a heightened perceived risk of default on the sovereign debt of those countries. Recovery has taken place but  downside risk remains. There has also been concern about its effect on other European Union economies, the euro currency and the  European Monetary Union. Aegon also cannot predict with certainty the effect a sovereign default may have on Aegon’s businesses,  results of operations, cash flows and financial condition, although the effect of such events may be material and adverse. Governmental action in the Netherlands, the United Kingdom, the United States, the European Union and elsewhere to address any of  the above may impact Aegon's businesses. Aegon cannot predict with certainty the effect that these or other government actions and  actions by the ECB or the Federal Reserve may have on the financial markets or on Aegon’s businesses, results of operations, cash  flows and financial condition. Credit risk is the risk of loss resulting from the default by, or failure to meet contractual obligations of issuers and counterparties. For  general account products, Aegon typically bears the risk for investment performance equaling the return of principal and interest.  Aegon is exposed to credit risk on its general account fixed-income portfolio (debt securities, mortgages and private placements),  over-the-counter (OTC) derivatives and reinsurance contracts. In addition, financial institutions acting as a counterparty on derivatives  may not perform their obligations. Default by issuers and counterparties on their financial obligations may be due to, among other  things, bankruptcy, lack of liquidity, market downturns or operational failures, and the collateral or security they provide may prove  inadequate to cover their obligations at the time of the default. Aegon’s investment portfolio among other investments contains Dutch government bonds, US Treasury, agency and state bonds, as  well as other government issued securities. There continues to be uncertainty regarding the ability of certain European nations (in  particular Greece, Ireland, Italy, Portugal and Spain) to satisfy their financial obligations. Due to the weak economic environment, Aegon  may incur significant investment impairments due to defaults and overall declines in the capital markets. Further excessive defaults or  other reductions in the value of these securities and loans may have a materially adverse effect on Aegon’s businesses, results of  operations, cash flows and financial condition. Exposure to equity markets exists in both assets and liabilities. Asset exposure exists through direct equity investment where Aegon  bears all or most of the volatility in returns and investment performance risk. Equity market exposure is also present in insurance and  investment contracts for account of policyholders where funds are invested in equities (such as variable annuities, unit-linked products  and mutual funds). Although most of the risk remains with the policyholder, lower investment returns can reduce the asset  Equity market risk A decline in equity markets may adversely affect Aegon’s profitability and shareholders´ equity, sales of savings and  investment products, and the amount of assets under management. Credit risk Defaults in Aegon’s debt securities, private placements and mortgage loan portfolios held in Aegon’s general account, or the  failure of certain counterparties, may adversely affect Aegon’s profitability and shareholders´ equity.