MNI BRIEF: Inflation, Income Cuts Boost FinStab Risks - ESRB

Risks to financial stabilty have increased over the past few months, reflecting persistently high inflation, tightening financial conditions and a “perceptible deterioration” in the economic outlook, the General Board of the European Systemic Risk Board announced Thursday.

So far the significant fall in asset prices this year has been largely orderly, the Board noted. But risks resulting from a possible sharp asset price correction remain elevated, while the fall in real disposable income of borrowers, coupled with possible significant price corrections in the housing market, could pose additional systemic risk.