Objectives of the roundtable
The session will assess the financial stability impacts of the economic environment – characterized by persistent high inflation, very high levels of public and private debt in many Member States and increased nominal interest rates – on the EU banking sector. The panel will also discuss how vulnerabilities in the non-bank financial sector can affect banks in Europe.
This session will not focus on climate and environmental risks in the banking sector or operational risks such as cyber risk, as these subjects are covered in other sessions of the Santiago agenda.
Points of discussion
- What are the main risks and vulnerabilities of the EU banking sector in the current context of persistently high inflation, weaker growth, near-record high levels of public and private debt and asset prices, rising nominal interest rates, still negative real interest rates in the euro area (calculated with using year on year head inflation or core inflation) and deteriorating credit risk?
- To what extent do vulnerabilities of non-bank financial institutions affect the EU banking sectors? What should be the prudential regulatory and supervisory priorities to appropriately address these risks?