The US Q209 earnings season surprised global financial market observers, contributing to an overall expectation that the global recession is nearing an end. Substantial capital injections by government or the private sector revitalized the banking industry in the US and around the globe since the beginning of 2009, according to Giles Keating, head of the Credit Suisse global economics and strategy group. "[M]any of the big banks are now in that rather good state of the economic cycle where they start to make operating profits," he said in commentary this week. "That allows them to withstand some of the losses which they are still making as some of the bad loans made during the run up to the credit crisis have come through." A number of small- and even some mid-sized banks failed in 2009 -- with Guaranty Bank bringing 2009's total to 81 -- but Keating does not see their failure as a threat to the stability of the overall banking system. He said there are even signs that the global recession will soon "very likely" be over. "In fact, some of the indicators are suggesting the recession might pretty well have ended now and we may be seeing the US, Europe, and Japan actually moving out of recession already," Keating said. "The emerging markets have largely already done that. So things are tentatively looking pretty good now." Inflation poses a long-term concern, however. In the next two or three years, the spare capacity and high unemployment should keep inflation down, he said. In four or five years, inflation may pose a greater threat as "governments may choose inflation as the easy way out to deal with their debt." Write to Diana Golobay.