by Niels Saelens
Posted in to •
3 Read less
Posted in to •
3 Read less
Today the European Central Bank presented its Financial Stability Review. In response to that report, Vice President Luis de Guindos, in a conversation with the American news site CNBC, warned of the possibility of a sharp decline in the stock market in the event of further shocks in the global economy..
Why is this important?
The economic outlook (in the short term) remains highly uncertain. For example, uncertainty in the financial sector has not yet completely disappeared, and the risk of a recession has not yet been ruled out. In fact, the gross domestic product of Germany, Europe’s largest economy, has contracted for two consecutive quarters.In the news: “He does not rule out a sharp drop in the stock markets,” Guindos said in an interview. CNBC. “The reason is that valuations are high, so if there is bad news on the macro outlook, that could trigger a correction in the markets.”
- In the report, the ECB noted that global markets had a strong start to the year on the back of lower energy prices, China’s reopening, and the surprising resilience of the Chinese economy.
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