ECB Financial Stability Review - Wasti Talks x VAC

ECB Financial Stability Review - exklusive insights bei Wasti Talks x VAC!

In a comprehensive presentation on July 8, Beatrice Scheubel presented the European Central Bank's Financial Stability Report.

Financial market developments & financial stability:
Changes in global trade policy are leading to a sharp increase in uncertainty with significant volatility spikes in the financial markets. Although the situation calmed down after the announcement of the tariff pause, excessive valuations and low liquidity buffers of non-banks increase the vulnerability of financial markets to further shocks. However, excessive valuations and low liquidity buffers at non-banks increase the vulnerability of financial markets to further shocks. The report therefore recommends, among other things, strengthening the regulatory framework for non-banks.

Impact on businesses & credit risks:
The intensification of trade conflicts could affect companies and private households in the euro area and entail credit risks for banks and non-banks. The euro area is an economy with a very high degree of openness. Trade tensions affect companies that are heavily oriented toward foreign trade. This can have consequences for private households if companies have to lay off staff due to trade-related impairments.
The possible consequence: rising credit risks for banks and non-banks, even if strong earnings and extensive capital and liquidity buffers should help banks to cushion greater credit risks.

Fiscal burdens could increase:
Weaker growth combined with higher defense spending, along with other structural challenges such as climate change, digitalization, and population aging, could further exacerbate the already strained budgetary situation in countries with weak fiscal fundamentals.

We would like to express our sincere thanks to Beatrice Scheubel and everyone present for an exciting and informative evening!

More information on Wasti e.V.: https://wasti-lmu.de/