2/4  BIS - Central bankers' speeches  Financial stability in the euro area has proved robust so far, but we continue to assess possible risks, taking into account a wide range of indicators.2 Euro area banks' exposure to the recent banking sector stress which arose in other regions has been limited. But challenges to funding and asset quality may weigh on future profitability.
More broadly, as financing conditions tighten, we will gain more insight into the resilience of euro area firms, households and banks. The medium-term orientation of our monetary policy strategy allows us to consider financial stability in monetary policy decisions if this supports the pursuit of price stability. Conversely, price stability remains as crucial as ever for durably preserving financial stability.