Challenges to financial stability increase amid downside risks to the growth outlook

EPA/NICOLAS BOUVY

(FILE) A file photo dated 15 December 2008 showing an exterior view of the European Bank of Investment in Luxembourg. The European Investment Bank has put on hold lending to the German carmaker Volkswagen, amid concerns that a previous loan may have played a role in its emissions scandal, the president of the European Union's lending arm Werner Hoyer says 14 January 2016. 'For many, many years we have been active in high-tech research and development with Volkswagen,' Werner Hoyer said in Brussels. 'We were astonished, disappointed and we are now concerned about the allegations, including indications by senior company executives of improper and possibly fraudulent behaviour by Volkswagen.'

Challenges to financial stability increase amid downside risks to the growth outlook


Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
+

Uncertainty about global economic growth prospects has led to bouts of high volatility in financial markets. This is the latest information coming from the Financial Stability Review, which is published twice a year by the European Central Bank, and provides an overview of potential risks to financial stability in the euro area.
Weaker than expected growth and a possible escalation of trade tensions could trigger further falls in asset prices, the review warns. The global leveraged loan sector, which has grown significantly in recent years, is susceptible to weaker corporate earnings. In addition to the high level of debt and large fiscal deficits, some countries could face rollover risks if market participants were to reassess sovereign risk.
In order to return to sustainable profitability, euro area banks need to tackle a number of structural challenges, is concluded in the report.

Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
+