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.
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
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.
- 29 November 2018
- Financial Stability Review, November 2018
- 24 May 2018
- Financial Stability Review, May 2018
- 29 November 2017
- Financial Stability Review, November 2017
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.
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.