EU banks not at risk, says ECB

ECB President Christine Lagarde. Image by Alexandros Michailidis/Shutterstock

THE European Central Bank (ECB) has allayed fears of a possible ‘contagion’ of the banking crisis affecting the US and Switzerland.

Following an emergency meeting in Frankfurt, the ECB led by Christine Lagarde has insisted that the EU banking system is “solid and resilient” and with only a minor exposition to Credit Suisse, which is still in trouble despite the urgent intervention by the Swiss National Bank.

As reported by El País, prior to this week’s urgent meeting the ECB had declared that it was “ready” to offer all the necessary liquidity to the European markets if it became necessary.

Despite the turbulence in the international markets caused by the collapses of Silicon Valley Bank and Credit Suisse, the ECB has decided to go ahead with plans to increase interest rates to 3.5 per cent in the ongoing struggle against inflation.

However, the institution has not revealed its future plans in this regard in order to be able to adapt to stock market movements over the next few months.

In the brief meeting this week, the ECB also discussed potential vulnerabilities of the European banking system and ways to control liquidity in an emergency.


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Written by

Glenn Wickman