Europe’s top banking supervisor warns of tougher times ahead

Claudia Buch (chair of the European Central Bank’s supervisory arm) says eurozone lenders face rising insolvencies, geopolitical risks and upheaval in energy-intensive industries. She affirmed that banks were “not out of the woods yet” despite emerging in what she said was a “good position” after the Covid-19 pandemic and Russia’s full-scale invasion of Ukraine.

The ECB’s increase in its benchmark interest rate to a record high of 4 per cent to tackle soaring inflation last year “still has to filter its way through the financial system”, Buch said, adding that bankruptcies and loan defaults were likely to keep rising for some time.

In this alert, you will read more about insolvencies, profits, regulation, climate change risks, ties to Russia and insights on credit risk revealed by Romania’s NBR stability report.