MNI BRIEF: ECB's de Guindos-Weak Growth Raises Tail Risks
ECB VP worried about possible threats to financial stability.
Weaker growth prospects are weighing on the outlook for financial stability in the euro area, ECB's vice president Luis de Guindos said in a speech Monday, adding that "geopolitical risks and political uncertainty continue to raise the likelihood of tail events."
"While financial markets have shown resilience in recent periods of turmoil, they remain vulnerable to adverse dynamics as risk pricing appears too benign", he said, citing the real estate sector and sovereign debt vulnerabilities as possible sources of fragility. Concerns about
Eurozone inflation is abating and risks to growth outlook "remain elevated and tilted to the downside" pointing to lower confidence. (See MNI INTERVIEW: ECB'S Wunsch Sees Restriction A While Longer)