2min chapter

The ECB Podcast cover image

Financial stability and bank runs

The ECB Podcast

CHAPTER

The Negatives of the Financial Markets

After the exceptionally strong rebound in financial markets at the start of the year, I think we can say that some of the old concerns have returned. Asset valuations are stretched again and as central banks have been pulling back from asset purchases, that's basically meant that two-way risk has returned while market liquidity is eroding. And second, even though there are signs that vulnerabilities in the non-bank sector are easing, we see investment funds adopting more cautious strategies. We still have concerns that some of them may not be holding sufficient amount of liquid securities to cope with stress.

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