ECB Warns of Margin Call Risks for Euro Zone's Shadow Banks

Euro zone shadow banks face the risk of receiving large margin calls or client redemptions they cannot meet because they do not have enough cash on hand, the European Central Bank (ECB) said on Wednesday.

The warning was part of the ECB’s twice yearly Financial Stability Review, in which it said the outlook for banks, funds and companies, particularly in real estate, remained “fragile” as high interest rates took an increasingly hefty toll on the economy.

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