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Pauline Lucile Avril
- 17 October 2025
- THE ECB BLOGBanks have bought back over €60 billion of their own shares since 2020, which is a sign of the industry’s confidence. However, share buybacks can also reduce the capital banks have available for potential crises. This blog post examines how euro area banks’ share prices reacted to these buybacks.Details
- JEL Code
- G10 : Financial Economics→General Financial Markets→General
G20 : Financial Economics→Financial Institutions and Services→General
- 20 May 2025
- FINANCIAL STABILITY REVIEW - ARTICLEFinancial Stability Review Issue 1, 2025Details
- Abstract
- Trade tensions can be a threat to financial stability, with both the implementation of trade restrictions and trade policy uncertainty resulting in adverse consequences. In this special feature, we show that trade policy uncertainty can adversely affect the real economy as well as banks’ funding, asset quality, profitability and lending. Policy authorities need to identify risks stemming from trade tensions, monitor their transmission and evaluate their potential impact on financial stability. Sound capital and liquidity buffers are financial institutions’ first line of defence to absorb shocks stemming from trade disruptions. However, banks should also conduct regular assessments to identify and evaluate these specific risks. In addition, they should diversify portfolios to minimise their exposure to such risks. A box within the special feature analyses the risks of euro area equities repricing across sectors in response to developments in the United States, with a particular focus on news relating to trade policy.
- JEL Code
- E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
F13 : International Economics→Trade→Trade Policy, International Trade Organizations
G18 : Financial Economics→General Financial Markets→Government Policy and Regulation
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages