Geopolitical tension, eurozone finances in uncertainty - ESRB Report: Banks, lending tightening trend
Eurozone banks are expected to face funding difficulties in the market, especially with the US dollar and other foreign currencies, if high geopolitical uncertainty persists, the European Systemic Risk Board warned.
The BERS report came as tensions between Europe and the US escalated this week over President Trump's plans for Greenland.
The EU's top financial risk watchdog found that geopolitical shocks tend to reduce banks' wholesale market borrowing as buyers of bank bonds and other instruments become more wary of geopolitical risk.
Banks reduced their foreign currency borrowing in the face of economic policy uncertainty.
The analysis also showed that sales of bank bonds and safe bonds were more resilient after these shocks, while financing through asset-backed securities and mortgages was more vulnerable.
Finally, it is seen that banks tend to tighten credit supply when US economic policy becomes more uncertain, with a decline of about 4.5% in total lending and an increase of about 90 basis points in interest rates at banks that are more exposed to the United States.
US presents 'New Gaza' development plan - Funding to be detailed in Washington in coming weeks
The United States announced plans on Thursday for a "New Gaza" rebuilt from scratch to include residential towers, data centers and coastal resorts. After......
Merz in Rome, meeting with Meloni "with new ideas" - Italian-German axis: Let's transform the European Union
A closer alliance between Italy and Germany is on the horizon, with the ambition to change Europe after decades of dominance by the Franco-German axis. In......
Albania and Kosovo lead Europe in home ownership - ALTAX: EU average 68%, Albania and Kosovo over 95%
Albania and Kosovo rank at the top of Europe in terms of home ownership rates, surpassing all European Union countries. The latest Eurostat data for 2024,......
Europe is reassessing the relationship with the US - Chancellor Merz calls on the EU: No hasty steps
EU leaders will review their ties with the US at an emergency summit after Trump's threat of tariffs and military action to buy Greenland shook confidence in......
America one step away from breaking away from WHO - Gostin: "Clear legal violation, Trump is likely to succeed"
The United States will formally withdraw from the World Health Organization, facing accusations that it has harmed both American and global health. The......
TikTok signs deal with US - New joint venture avoids US ban
TikTok's Chinese owner, ByteDance, announced that it has finalized a deal to create a majority-owned American joint venture. The partnership avoids a US ban......
Director of Tax Investigation, Martini reacts after publications on the SPAK hacking case: False allegations. Supports the work and integrity of the Prosecution
The Director of Tax Investigation at the General Directorate of Taxes, Anton Martini, has reacted to a news item published in an online media outlet on the......
Davos, Zelensky unhappy with Europe, US-Russia-Ukraine trilateral meeting expected
In his speech in Davos, Ukrainian President Zelensky accused European leaders of waiting for directives from Trump instead of acting on their own. According......
