ECB Sees Economic Spillover Risks for Banks From Russia Turmoil
- Direct risks manageable even in extreme scenario, Enria says
- Indirect effects are less known and must be watched, he says
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European banks have so far navigated the turmoil resulting from Russia’s invasion of Ukraine but need to be prepared for knock-on effects in seemingly unrelated parts of their business, their top regulator said.
Direct exposures to Russia are “manageable overall” and even scenarios where banks would walk away from their Russian units appear contained given their capital strength, Andrea Enria, who leads the European Central Bank’s Supervisory Board, said Tuesday.