ECB’s de Guindos: Financial Stability Impact of War Relatively Contained So Far
6 April 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Vice President Luis de Guindos on Wednesday said that Russian military aggression against Ukraine had not materially affected euro area financial stability.
Speaking at a joint conference of the ECB and the European Commission on European financial integration, de Guindos said with respect to the war that ‘the economic fallout has also re-introduced substantial elements of uncertainty just as the euro area economy is emerging from the pandemic.’
The response of democratic countries in the form of sanctions levied against Russia seemed at first to deliver a blow to euro area financial integration, but that is no longer the case, he said.
‘For the euro area, the financial stability impact of the war has so far been relatively contained’, he said. ‘Markets have generally been functioning well’ and ‘the economic fallout has not had a sizeable impact on the EU banking or financial systems as a whole’, he said.
The fact that equity prices of regional banks fell disproportionately to their relatively limited exposure to Russia indicated ‘much greater concerns about growth and inflation, and the impact the conflict is having in amplifying them’, he said.