16 July
ECB's Donnery: eurozone banks are underestimating potential credit losses in auto sector
On Thursday, European Central Bank (ECB) official Sharon Donnery warned that eurozone financial institutions are not fully assessing potential credit losses in the automotive and commercial real estate sectors.
As a member of the ECB Supervisory Board noted, the reserves of financial institutions in these areas require closer attention. However, loan portfolios generally look robust.
This month, the EU auto sector has seen a sharp decline in share prices due to US trade policy, Bloomberg experts emphasize. Donnery did not cite this as a direct reason for her caution, but stressed global economic uncertainty.
Banks' reserves may partially cover risks, especially in the face of heightened global trade tensions, the official said. However, she assured the public that European financial institutions remain resilient, with strong capital and liquidity positions.
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