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.
963彩票开户Economic growth in the euro area is expected to remain subdued for longer. 963彩票开户 for yield has continued in the low interest rate environment amid signs of excessive financial risk-taking, including by some non-banks, highly leveraged corporates and real estate sectors.
Private and public sector debt sustainability concerns remain, but are mitigated by low interest rates. Pockets of vulnerability in the non-financial corporate sector and property markets may need to be monitored closely going forward.
As investors search for yield, prices of both safer and riskier financial assets have risen. As a result, asset valuations are increasingly dependent on low benchmark yields and more sensitive to changes in them.
While the non-bank financial sector continues to expand, there are challenges to profitability and solvency in the low interest rate environment. Investment funds, insurers and pension funds have continued to take on more liquidity and credit risk.
All countries in the euro area have implemented macroprudential measures to mitigate risks and build resilience in recent years. However, the countercyclical capital buffer could be used more actively in some countries.
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.