ECB’s Escrivá: Market Volatility Due to High Valuations, Low Risk Being Priced In

13 May 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member José Luis Escrivá said on Tuesday that sharp moves in the market in the past few weeks were due to very high valuations and low risk being priced in.

In a joint interview along with Deutsche Bundesbank President Joachim Nagel given to Spanish daily El Mundo and German daily Süddeutsche Zeitung, Escrivá, who heads the Banco de España, said, ‘I would be inclined to think that this [high volatility some weeks ago] was largely due to the fact that valuations were very high in some markets and the risk priced in was very low.’

The ECB should wait and keep monitoring market developments, he said.

Uncertainty created by the US administration was generating a much more complex environment, he said, which made monetary policy decisions very hard.

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