Euro area financial stability environment remains challenging
PRESS RELEASE
- PRESS RELEASE
Euro area financial stability environment remains challenging
20 November 2019
Downside risks to global and euro area economic growth have increased and continue to create financial stability challenges, according to the November2019 Financial Stability Review (FSR) of the European Central Bank (ECB).
- Low interest rates should support economic activity in the euro area, but may also encourage excessive risk-taking by some non-bank financial institutions and highly leveraged non-financial corporations, and in some real estate markets.
- In the event of a sudden repricing of financial assets, growing credit and liquidity risk in some parts of the euro area non-bank financial sector coupled with higher leverage in investment funds may lead non-banks to respond in ways that cause stress to spread to the wider financial system.
- Authorities are using, and should continue to use, targeted macroprudential measures, where available, to address the associated risks to financial stability.