I will start with a brief review of the overall impact of the financial market turmoil on the global banking system and the current macroeconomic outlook. I will then examine the risks and vulnerabilities in: (1) the global macro-financial environment; (2) the euro area corporate and household sectors and; (3) the euro area financial system.
Finally, I will conclude with our overall assessment of risks to euro area financial stability in the period ahead. II. The financial market turmoil: overview  Since the publication of the previous Financial Stability Review in June 2008, the financial crisis has intensified. Banks had to absorb further asset valuation write-downs in an environment where wholesale funding costs remained elevated.