The persistence of the financial turmoil may also make the financial system more vulnerable to the crystallisation of other risks that have been previously identified by the ECB and other central banks and institutions. These include the possibility of a more broad-based turn in the global credit cycle, a disorderly unwinding of global imbalances and the financial stability implications of persistently elevated energy prices.
It seems that large euro area banks have so far weathered the financial storm somewhat better than their global peers. Nevertheless, the investment losses suffered by some banks could make these institutions more vulnerable to a sharper deterioration in the credit cycle. All in all, the outlook for both global and euro area financial stability remains highly uncertain.