There are also risks to the banking system from any fragility in non-bank financial institutions, de Guindos highlighted.<\/p>\n

“We indicate that interlinkages are relevant and are important, so that you cannot immunize what happens in the banking industry from the non-banking industry.”<\/p>\n

The ECB report said that, although the non-bank financial sector remains resilient for now, exposures to credit risk remain high, opening it to “the risk of material losses should corporate sector fundamentals deteriorate substantially.”<\/p>\n

“In addition, non-banks’ exposure to property markets has increased markedly in recent years, rendering institutions vulnerable to ongoing property price corrections,” it said.<\/p>\n

“Strong links with banks, as an important source of funding for instance, could also give rise to additional vulnerabilities in the banking sector via liquidity and credit risk spillovers.”<\/p>\n<\/div>\n<\/div>\n

Source: www.cnbc.com<\/p>\n","protected":false},"excerpt":{"rendered":"

Christine Lagarde (R), President of the European Central Bank (ECB), and Vicepresident Luis de Guindos (L) Thomas Lohnes | Getty Images News | Getty Images Financial markets could face a sharp downturn in the event of any further shocks to the global economy, European Central Bank Vice-President Luis de Guindos told CNBC on Wednesday. Earlier…<\/p>\n","protected":false},"author":1,"featured_media":35565,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"WB4WB4WP_MODE":"","WB4WP_PAGE_SCRIPTS":"","WB4WP_PAGE_STYLES":"","WB4WP_PAGE_FONTS":"","WB4WP_PAGE_HEADER":"","WB4WP_PAGE_FOOTER":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[78],"tags":[],"class_list":["post-35564","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\n