European Central Bank (ECB) cautions about potential impact on major European banks if funds face difficulties
The euro zone’s top banks may take a hit if their financial clients, such as funds, insurers and clearing houses, withdrew their deposits or otherwise ran into trouble, the European Central Bank warned on Tuesday.
The ECB study looked into the risk of spillovers from so-called shadow banks — such as funds and other financial companies that provide funding in one form or another — to traditional lenders, and vice versa.
It found the exposure both in terms of bank assets, such as loans, and liabilities, such as deposits, was concentrated in the euro zone’s top 13 lenders, including its eight globally important banks.
