This working paper studies a global banking-sector default cycle constructed from firm-level probabilities of default across a broad set of countries and evaluates its macro-financial implications. Using a dynamic factor model, it extracts a dominant global component in bank default risk and document substantial cross-country heterogeneity in exposure. It then analyzes its association with credit and real economic outcomes. The evidence shows that increases in global banking-sector default risk tend to follow credit tightening and precede declines in real activity, particularly in elevated stress regimes. The relationship is state-dependent, with larger output responses concentrated during stressed periods, while credit dynamics exhibit more persistent adjustment. Overall, the findings indicate that market-implied banking-sector default risk captures periods in which financial strain is reflected in market-based measures of banking stress and is closely linked to real economic weakness.