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This Quarterly Assessment considers stress and resilience in international capital markets in Europe, taking account of recent official sector initiatives both in Europe and at global level. The tightening of monetary policy by central banks through the rise in short-term interest rates, which has been necessary to control inflation, has complicated the task for central banks in ensuring financial stability. So the assessment considers, first, the review by the authorities of financial stability in response to stress in the banking system
in the spring of 2023; second, the steps being considered by the authorities to strengthen the resilience of the non-bank financial sector; third, the risk to resilience from market fragmentation as a result of regulatory divergence; and finally, the contribution that market firms themselves can make to strengthening resilience in
international capital markets....
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