European watchdogs increase monitoring of banks as global stocks tumble

Central banks and their supervisors across the eurozone, the UK, and Switzerland have heightened scrutiny of financial institutions and markets following a global stock sell-off triggered by aggressive US trade policies. However, Reuters reports that no reasons for alarm have been identified so far.

The European Central Bank (ECB) has increased its monitoring of the situation, as a market crash could potentially harm the eurozone economy. The results of the check so far appear encouraging, the sources said. The regulator's supervisors are currently examining deposits and other forms of funding.

ECB officials have particularly focused on yield spreads between German bonds and those of the region's weaker economies, Reuters notes. According to Reuters, while these spreads have widened, they remain contained—with Italy's 10-year bonds trading just 122 basis points above their German counterparts.