ECB and ESRB warn of financial stability risk from geopolitics
New model takes prediction data to show US domestic politics affecting eurozone financial markets
The European Central Bank and the European Systemic Risk Board have warned that “geoeconomic fragmentation” is jeopardising global financial stability.
In a joint report published on January 22, the institutions outline a new “comprehensive framework” to monitor geopolitical risk. This incorporates a range of quantitative indicators that the authors say can be used to assess how geopolitical events will affect macroeconomic and financial conditions. The indicators include military conflicts
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