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Financial Stability Review, May 2020
Since February 2020, the coronavirus (COVID-19) pandemic has disrupted social and economic life across the euro area and the globe, to an extent unseen in most of our lifetimes and unexpected six months ago. It has caused one of the largest and sharpest economic contractions in recent history. As news unfolded of the spread of the virus, global financial markets responded with sell-offs, volatility and a sharp increase in borrowing costs, which rivalled ‒ and at times exceeded ‒ those seen during the 2008 global financial crisis.
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Pandemic increases risks to financial stability
Despite the immense social and economic disruption in the wake of the coronavirus (COVID-19) pandemic, decisive policy responses have helped to prevent a seizing-up of the financial system. However, even as infection rates fall in many countries, the impact on the economy and markets has unearthed and increased existing vulnerabilities for euro area financial stability, according to the May 2020 Financial Stability Review (FSR) of the European Central Bank (ECB). Financial stability risks could arise as these vulnerabilities, identified in earlier issues, interact with the pandemic. These include richly valued asset ... (full story)
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#ECB SEES DEBT-SUSTAINABILITY RISKS AFTER PUBLIC VIRUS SPENDING - BBG
— Christophe Barraud (@C_Barraud) May 26, 2020
*ECB CITES WEAK BANK PROFITS, CORPORATE DOWNGRADES AS RISKS
*INSURERS UNDER PRESSURE FROM LOW RATES, ASSET PRICES
*ECB SAYS PROPERTY PRICE CORRECTION MORE LIKELY DUE TO VIRUS
*Link: https://t.co/uIP5ZCgmpr