Netherlands Bank highlights ‘major risk’ of European crisis escalating

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An escalation of the European sovereign debt crisis remains a "major risk", and longer-term problems could become entrenched without the right action, according the Netherlands Bank's latest Overview of Financial Stability.

The report urged policy-makers not to become complacent. "Any downgrading of the European growth outlook, deferral of structural reforms or unexpected losses in the banking sector could lead to a rapid reversal of market sentiment," the report said.

Other risks though were

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