Svoboda | Graniru | BBC Russia | Golosameriki | Facebook

Financial Stability Review

The Financial Stability Review provides an overview of potential risks to financial stability in the euro area. It aims to promote awareness in the financial industry and among the public of euro area financial stability issues.

It is published twice a year.

November 2018
Financial Stability Review
The financial stability
environment in the euro area
has become more challenging

Looking ahead to the next two years, risks remain:

1. Sharp falls in global asset prices

2. Debt sustainability concerns

3. Weak bank profitability jeopardising credit supply

4. Liquidity risks in the investment fund sector


November 2018
Financial stability review

Overview

A growing economy and a more resilient banking sector continue to support financial stability in the euro area. However, vulnerabilities in global financial markets continue to build, with political and policy uncertainties on the rise.

Macro-financial and credit environment

While an expanding euro area economy continues to benefit households and firms, some concerns about sovereign debt sustainability are re-emerging.

Financial markets and valuations

Volatility has increased in certain financial market segments. Geopolitical concerns and tensions in sovereign bond markets have come to the fore.

Euro area financial institutions

Banks have benefitted from a robust economic environment, but structural challenges remain. Investment funds continue to increase their exposures to illiquid and risky assets.

Regulatory framework

Ten years on from the start of the global financial crisis, the main regulatory reforms are near to completion.

What is financial stability?

Financial stability can be defined as a condition in which the financial system – which comprises financial intermediaries, markets and market infrastructures – is capable of withstanding shocks and the unravelling of financial imbalances.

This mitigates the likelihood of disruptions in the financial intermediation process that are systemic; that is, severe enough to trigger a material contraction of real economic activity.


Macroprudential Bulletin
Spotlight on financial stability