MNI BRIEF: European Systemic Risk Board Issues Warning

The European Systemic Risk Board said on Thursday that it has issued a warning, telling market participants and relevant authorities to continue to prepare for materialisation of tail-risk scenarios.

Credit institutions should adjust capital projections to include adverse scenarios "assuming severe, but plausible stress under prolonged periods," it said.

The probability of tail-risk scenarios materialising has increased since the beginning of 2022, and has been exacerbated by recent geopolitical developments," it said, pointing to risks to financial stability from a sharp fall in asset prices, rising mortgage rates and growing cyber risks.