ECB Warns Record Inflation Spells Trouble for Banks, States
- Lenders may need bigger provisions amid worsening outlook
- Financial Stability Review also warns of asset-price swings
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The European Central Bank warned of rising stability risks for everyone from lenders to governments and households as the economic outlook darkens and officials battle record inflation.
The cost-of-living squeeze is hurting people’s ability to service debts, while Europe’s worsening growth prospects threaten corporate profits, the ECB said Wednesday in its Financial Stability Review.