Is monetary tightening a threat to financial stability?

Christophe Blot (), Jérôme Creel () and François Geerolf ()
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Christophe Blot: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, UPN - Université Paris Nanterre
Jérôme Creel: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, ESCP Europe - Ecole Supérieure de Commerce de Paris
François Geerolf: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research

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Abstract: The rise of policy rates in the euro area has led to a tightening of financing conditions raising concerns for financial stability. The risk of financial crisis should be neither ignored nor overstated. The euro area is not facing conditions for which there would be the highest probability of a crisis. The risk faced by banks depends on the share of adjustable-rate mortgages. At this stage, net interest margin of banks and profitability have slightly improved.

Date: 2023-05-30
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Published in PE 747.843, European Parliament's Committee on Economic and Monetary Affairs (ECON). 2023, 34 p

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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-05616198

DOI: 10.2861/031201

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