ECB Braces for Hits to Banks’ Loan Books as War Intensifies
- Regulator discussing financial hits, compliance amid sanctions
- Talks are said to be reminiscent of early pandemic days
Raifeissen Bank International bank branch in Bucharest, Romania.
Photographer: Nicolo Filippo Rosso/BloombergThis article is for subscribers only.
The European Central Bank is concerned that lenders’ balance sheets could suffer a series of hits after Russia’s invasion of Ukraine plunged the global economy and markets into turmoil.
The regulator has told banks to assess whether they need to set aside money for potential losses not just on loans to Russian firms, but also on lending to companies that are less directly affected by the war and sanctions or which do business in Russia or Ukraine, according to people familiar with the matter.