Financial stability vulnerabilities have eased but the outlook remains fragile, ECB finds
- Euro area financial stability conditions have improved as recession risks decline, but markets remain exposed to possible adverse macro-financial and geopolitical surprises.
- Tight financial conditions are testing the resilience of vulnerable euro area households, firms and governments, while downturn in property market presses real estate firms.
- Euro area banks have been a source of resilience, but low market valuations suggest challenges remain, notably related to asset quality, funding and revenues.
