This constantly keeps the potential for financial contagion at the center of financial stability considerations. But the highly interconnected network of institutions also implies that cyber-attacks may pose an increasingly serious concern to the Eurosystem’s financial stability. The issue with cyber-attacks is further accentuated due to its dynamic, constantly evolving nature and because cyber-attacks are borderless.
Some key securitization markets, including those for nonconforming mortgages, continue to function poorly if at all. These developments in financial markets – which themselves reflect, in part, greater concerns about housing and the economic outlook more generally – have weighed on real economic activity.