ECB’s Knot: Coordination Essential to Global Financial System’s Resilience

5 December 2023

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Klaas Knot on Tuesday said that there were still many vulnerabilities in the global financial system that could be addressed by global coordination.

Speaking online at a forum about the Asian region during the COP28 in Dubai, a text of which was posted to the website of De Nederlandsche Bank, which he heads, Knot said that ‘vulnerabilities in the global financial system remain elevated.’

‘Tightening financial conditions and high levels of debt create challenges for both bank and non-bank lenders’, he said. ‘In tackling the challenges ahead, formulating policy responses and building resilience, it is essential that there is global coordination and that we pay attention to potential cross-border spill-overs.’

Considering a regional approach was key to coordinate responses to the present issues, he said.   

‘To gain a truly global perspective, it is important for us to incorporate the experience and intelligence of emerging market economies (EMEs) and also look beyond our G20 membership’, he said.

Efforts to maintain a resilient and stable financial system were essential to assure sustaining economic growth in the present scenario, he said.

‘For our part, the FSB [Financial Stability Board] will remain focused on building resilience, so that the financial system can continue to play its part in building strong, sustainable, inclusive, and balanced growth’, he said.