European banks: recession risks flash red
Europe faces severe risks to its financial stability, regulators warned this week. The post-financial crisis drive to build resilience in the financial sector is set to be put to the test.
The European Systemic Risk Board’s first-of-a-kind alert was largely based on the war in Ukraine. It was drafted the week before the “mini” Budget triggered turmoil in UK markets, forcing the Bank of England to intervene by buying bonds.
Pension funds, not banks, have been at the heart of the UK market tumult. The former have been forced to sell assets to meet margin calls. But the prospect of sharp rises in interest rates have forced banks to withdraw mortgage products. That has dragged down share prices, though signs of wider financial contagion are not apparent.
This story originally appeared on: Financial Times - Author:Tax Cognition
