According to the European Central Bank (ECB), the financial markets remain vulnerable to negative shocks – even if the environment has brightened thanks to falling inflation and improved economic prospects. “Geopolitical risks continue to cloud the outlook for financial stability,” said ECB Vice President Luis de Guindos, summarizing the findings of the central bank’s financial stability report, which was published on Thursday.
The recently more optimistic mood on the markets could quickly change, warn the euro currency watchdogs: Geopolitical tensions could trigger unrest and “create the potential for excessive market reactions, which could be amplified by non-banks with structural liquidity weaknesses”.
The banks in the euro area, which have recently earned well, have proven to be resilient. However, low valuations of financial institutions suggested that investors were concerned about the sustainability of banks’ profitability. Among other things, there are signs of increasing losses in some loan portfolios, particularly in the area of commercial real estate financing. In addition, the financing costs for financial institutions are likely to remain high even if key interest rates fall.
My themes
For your saved topics were
new articles found.
info By clicking on the icon you can add the keyword to your topics.
info
By clicking on the icon you open your “my topics” page. They have of 15 keywords saved and would have to remove keywords.
info By clicking on the icon you can remove the keyword from your topics.
Add the topic to your topics.
Source: Nachrichten
