Eurozone banks must prepare for unprecedented shocks that cause serious disruptions with far-reaching consequences for financial systems, the European Central Bank said on Tuesday, outlining its supervisory priorities for the next three years.

The ECB has long argued that banks are facing a new reality with more frequent shocks, from charges to cyber attacks, requiring them to be ready for a range of possibilities without knowing the nature of correctly of the next crisis, writes Reuters.

This requires healthy capital reserves, a modern technological infrastructure, proactive management that is in line with financial realities and much more.

“Geopolitical tensions and changes in trade policies, climate and nature-related crises, demographic changes and technological disruptions are exacerbating structural weaknesses, making the probability of extreme and improbable events extremely high,” the ECB said in a statement.

Therefore, strengthening banks’ resilience to political risk and uncertainty will remain a top priority for ECB supervision, with a focus on prudent risk-taking and adequate capitalization, the ECB said. /tesheshi.com/

Kaynak: prizrenpost