In its bi-annual assessment of the Euro area financial conditions, the European Central Bank (ECB) highlighted on Wednesday, “the outlook for financial stability is fragile.”
Additional takeaways
History suggests soft landing difficult, but not impossible.
A weak economy heightens stability risks from hikes.
It’s crucial to reach the EU deal on fiscal rules.
Shadow banks have very low liquidity buffers.
Market reaction
At the time of writing, EUR/USD is trading at 1.0895, down 0.12% on the day.
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