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MNI BRIEF: Non-Banks' Covid Fin Risks Need Monitoring - ESRB

(MNI) Frankfurt

Cyclical risks to the stability of EU-area non-bank financial intermediaries as a result of the Covid-19 crisis include uncertainty over the speed of economic recovery; rising indebtedness, increased credit risk and risks arising from credit downgrades; the decoupling of financial markets from the real economy, the fragile nature of liquidity in some markets, according to the EU Non-bank Financial Intermediation Risk Monitor 2021 published by the European Systemic Risk Board Monday.

Excessive risk-taking, liquidity transformation and excessive leveraging, require ongoing monitoring, the report concluded, alongside risks stemming from the low interest rate environment and the risk of contagion across borders and non-banking sectors.

MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
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MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
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