ECB flags threat of ‘abrupt reversal’ in risk premia
Latest review identifies two ‘medium-level systemic risks’ to the eurozone's financial stability, weak profitability prospects for banks and a potential ‘sharp adjustment’ in risk premia
An "abrupt reversal" in risk premia is a key risk to the eurozone's financial stability, the European Central Bank (ECB) said today (November 25), adding that its impact could be "amplified" by low market liquidity.
This was the central finding of the ECB's latest financial stability review, published twice yearly, which observed the financial system had "weathered challenges on several fronts" in the second half of this year.
The two largest threats to stability – accorded a "medium-level
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