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2026-05-27 17:25:19
[ECB Warns of Sudden Market Correction Risks; Asset Prices High and Downside Risks Underestimated] ⑴ The European Central Bank (ECB) warned that financial markets face the risk of a sudden and significant correction as investors downplay several threats, including the conflict with Iran. ⑵ In its semi-annual Financial Stability Review, the ECB stated on Wednesday that despite some recent market adjustments, asset prices remain "high" by historical standards, while downside risks from geopolitical, fiscal, and macro-financial conditions appear to be "underestimated." ⑶ The ECB Vice President stated, "This makes markets susceptible to sharp revaluations. If this occurs, non-bank financial institutions could amplify financial market volatility."
