MNI BRIEF: Less Fiscal Space Case For Robust Banks - ECB Buch

Reduced Euro Area fiscal space is a good reason why banks need to reinforce their resilience, ECB Supervisory Board Chair Claudia Buch said Monday.

"One of the things we see is that risk premia are relatively compressed right now and valuations are also relatively high and this is why we have been arguing we need sufficient resilience in case market sentiment changes," she told the European Parliament's ECON Committee.

The Covid and energy crises were to a "large extent buffered" by fiscal policy, Buch noted, adding that "given fiscal space is less plentiful than it may have been in the past, I think it's important we have sufficient resilience in the sector so that banks can continue lending if times get a bit rough."