“Financial system will weather the storm well”

Paris The President of the European Banking Association, Ana Botín, considers the Russian risk for the financial system to be manageable. The war in Ukraine and Western sanctions against Russia are not a systemic risk, Botín said in an interview conducted by Handelsblatt together with France’s Les Échos, Spain’s El Mundo and Italy’s Corriere della Sera.

It is clear that there will be higher inflation and more volatility. Nevertheless: “I think the financial system will weather this storm well.” The European banks are well positioned. “We have a good capital base. We are liquid. We have significantly improved our risk management and stress testing.”

European bank stocks had lost significant value in the past few days. This is not only due to the financial sanctions on business with Russia. Banks also face indirect risks if energy prices skyrocket as a result of the war and the global economic recovery after the corona crisis slows down.