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ECB Warns of Stock Market Risks Amid Global Trade Tensions
ECB Warns of Stock Market Risks Amid Global Trade Tensions
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The European Central Bank’s latest Financial Stability Review strikes a cautionary tone on equity markets. Vice President Luis de Guindos acknowledges resilient market functioning despite recent sell-offs, but flags concerning disconnects between credit spreads and underlying risks.
Valuations remain stretched across asset classes, with particular vulnerability in corporate debt markets. The ECB’s warning comes as global trade uncertainties threaten to disrupt the fragile recovery.
Open-ended corporate bond funds face mounting liquidity pressures, creating potential contagion channels. Market participants are advised to monitor these structural weaknesses amid shifting regulatory landscapes.
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