Financial stability conditions in the euro zone have worsened amid the conflict between Russia and Ukraine, which has boosted energy and commodity prices and exacerbated risks to inflation and growth in the bloc, according to a financial stability report published by the Central Bank. (ECB) this Wednesday (25).
“The terrible war in Ukraine has brought immense human suffering,” says ECB Vice President Luis de Guindos in the document.
“It has also amplified risks to financial stability through its impact on virtually every aspect of economic activity and financing conditions,” he adds.
In the report, the ECB assesses that the reaction of financial markets to the Russian-forced invasion of Ukraine was largely orderly, but points out that energy and commodity prices remain high and volatile, causing “some disturbance” in the derivatives markets of these countries. products.
The ECB also predicts that fragilities could increase given the uncertain trajectory of the war and changing expectations for policy normalization in advanced economies.
Other factors, such as a more widespread worsening of the Covid-19 pandemic, weaknesses in key emerging countries or a more pronounced slowdown in Chinese economic activity, could also influence risks to eurozone growth and inflation, according to the ECB.
Source: CNN Brasil
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