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.
For example, the Banking Regulation Act expressly prohibits banks from lending to directors on the board and to entities in which they are interested. Regulations also prohibit lending to relatives of directors without the prior approval or knowledge of the board.