European Central Bank

War, soaring energy prices and upside risks to inflation are clouding the financial stability outlook for the euro area. In the latest episode of Euro Matters, host Paul Gordon speaks with John Fell about how well the financial system is holding up as it faces two potentially colliding shocks: AI disruption and an energy shock stemming from the war in the Middle East. So what are the main takeaways? 🔹 The system remains resilient, but the combination of these shocks is creating new uncertainty. 🔹 AI optimism has helped support high valuations, even as questions remain about whether these expectations will be met. 🔹 At the same time, higher energy prices are weighing on the outlook and could amplify vulnerabilities across markets and balance sheets. 🔹 Banks remain a source of strength. Profitability is solid, capital buffers are strong and non-performing loans remain low. 🔹 Private credit warrants closer attention. Opacity and data gaps make it harder to assess how stress could spread. Listen to the full episode wherever you get your podcasts! 👉 https://lnkd.in/d2yzBkkc

In an uncertain risk environment, financial conglomerates or “bancassurers”: are navigating a much more complex landscape than stand-alone banks, says Supervisory Board member Anneli Tuominen. Their combined model creates additional risk channels – from cyber and AI vulnerabilities to geopolitical uncertainty and exposures via non-bank financial institutions – meaning shocks can spread faster and more intensely. To stay resilient, they need to: 🔹strengthen governance and risk oversight 🔹invest in operational resilience 🔹improve crisis communication, both internally and externally At the same time, regulators have a role to play – by simplifying rules and deepening European integration so that banks can focus on managing real risks, not complexity. Read the speech to learn more 👉 https://lnkd.in/dDT_J8ym

📢 Our latest edition of Supervision Spotlight is here!   European banking supervision continues to evolve, but its core objective – ensuring that banks remain resilient – hasn’t changed.   In this edition, Supervisory Board Vice-Chair Frank Elderson discusses the banking union, our initiatives to streamline and simplify supervision, and the pressing cybersecurity risks posed by Mythos. He argues that an integrated and resilient banking market is crucial for a more competitive Europe.   Interested? Read the newsletter for the full picture.   And subscribe to stay up to date with all things banking supervision.

Especially in the age of AI, Europe’s banks need to be operationally resilient to stay strong and competitive. In a speech at the Goldman Sachs European Financials Conference 2026, Supervisory Board Vice-Chair Frank Elderson highlights that: 𝐀𝐝𝐯𝐚𝐧𝐜𝐞𝐦𝐞𝐧𝐭𝐬 𝐢𝐧 𝐀𝐈 𝐚𝐫𝐞 𝐫𝐞𝐬𝐡𝐚𝐩𝐢𝐧𝐠 𝐭𝐡𝐞 𝐭𝐡𝐫𝐞𝐚𝐭 𝐥𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞. 𝐁𝐚𝐧𝐤𝐬 𝐭𝐡𝐞𝐫𝐞𝐟𝐨𝐫𝐞 𝐧𝐞𝐞𝐝 𝐭𝐨 𝐩𝐫𝐞𝐩𝐚𝐫𝐞 𝐦𝐨𝐫𝐞 𝐪𝐮𝐢𝐜𝐤𝐥𝐲, 𝐦𝐨𝐫𝐞 𝐞𝐟𝐟𝐞𝐜𝐭𝐢𝐯𝐞𝐥𝐲 𝐚𝐧𝐝 𝐦𝐨𝐫𝐞 𝐜𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭𝐥𝐲 𝐚𝐜𝐫𝐨𝐬𝐬 𝐭𝐡𝐞 𝐬𝐞𝐜𝐭𝐨𝐫 𝐭𝐨 𝐞𝐧𝐬𝐮𝐫𝐞 𝐭𝐡𝐞𝐢𝐫 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐜𝐞. While AI has its benefits for banks, it can also amplify the capabilities available to malicious actors. And new generations of AI models have increasingly advanced cybersecurity capabilities that need to be managed. 𝐁𝐚𝐧𝐤𝐬’ 𝐦𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐛𝐨𝐝𝐢𝐞𝐬 𝐩𝐥𝐚𝐲 𝐚 𝐜𝐫𝐮𝐜𝐢𝐚𝐥 𝐫𝐨𝐥𝐞 𝐢𝐧 𝐚𝐝𝐝𝐫𝐞𝐬𝐬𝐢𝐧𝐠 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐜𝐞. Challenges posed by new generations of AI models are not only a cybersecurity issue, but a strategic challenge with potential implications for banks’ safety and soundness. This makes it essential for banks’ management bodies to take clear ownership of the issue ensuring that resources and tools are available that match its scale. 𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧𝐢𝐧𝐠 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐜𝐞 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐬 𝐦𝐮𝐥𝐭𝐢-𝐲𝐞𝐚𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐢𝐧 𝐩𝐞𝐨𝐩𝐥𝐞, 𝐬𝐲𝐬𝐭𝐞𝐦𝐬 𝐚𝐧𝐝 𝐠𝐨𝐯𝐞𝐫𝐧𝐚𝐧𝐜𝐞. It requires continuous effort and improvement, rather than short-term quick fixes. 𝐒𝐮𝐩𝐞𝐫𝐯𝐢𝐬𝐨𝐫𝐬 𝐚𝐥𝐬𝐨 𝐡𝐚𝐯𝐞 𝐚 𝐫𝐨𝐥𝐞 𝐭𝐨 𝐩𝐥𝐚𝐲 𝐢𝐧 𝐞𝐧𝐬𝐮𝐫𝐢𝐧𝐠 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐜𝐞. We will support banks that have more limited capabilities by highlighting areas of attention and sharing good practices. Read the full speech to learn more 👉 https://lnkd.in/dKi_PkjD

💶 How did the euro perform on the global stage in 2025? Here are some key findings from our report published today: 🔹 The international role of the euro grew moderately in 2025, and it remains the world's second most important currency after the US dollar. 🔹 The euro also became the leading currency for international green and sustainable bonds for the first time. 🔹 At the same time, fragmentation is growing in the international monetary system and we cannot be complacent. There is an opening for the euro to enhance its global appeal. But this depends on action: deeper, more liquid capital markets and progress towards a fully integrated savings and investments union remain critical. Read the full report 👉 https://lnkd.in/dVVGgQcN

Welcome to Boris Vujčić, who joins us as the ECB’s Vice-President today. He led Croatia into the euro area and he brings a wealth of experience to his new role on the Executive Board. We wish him all the best and look forward to working with him.

Luis de Guindos finishes his term of office as ECB Vice-President today. He contributed to monetary policy decisions during a period of significant challenges, supporting the ECB’s commitment to price stability. And he played a key role in ensuring the smooth functioning of the financial system and the resilience of the European banking sector. He led the ECB’s High-Level Task Force on Simplification, which made proposals for simplifying the European regulatory, supervisory and reporting framework for banks. He also showed an unwavering commitment to achieving a truly single banking union and building the savings and investments union. Thank you, Luis. We wish you all the best for the future!

Catherine Steer’s favourite falafel wrap went from €5 to €7 – and it sent her down a rabbit hole 🥙 Join the host of our What the Euro?! series as she explores a simple question: why do prices seem to be going up all the time? Along the way, you’ll uncover what’s behind the cost-of-living squeeze, why it hits some people harder than others and what the ECB is doing about it. In short: 🔹 Headline inflation isn’t “your” inflation. The number you see in the news is an average based on a basket of goods and services. Your personal inflation rate depends on what you spend the most on, so price increases can feel different for different people. 🔹 Central banks use interest rates to keep prices stable. When inflation is too high, they can raise rates to make borrowing more expensive, dampen demand and take the pressure off prices. But this doesn’t happen overnight – and not all prices respond quickly. Want to learn more? Listen to the latest episode of Euro Matters wherever you get your podcasts! 🎙️

📢 Our latest edition of Supervision Spotlight is here! As supervisors, we make sure that banks abide by rules. But we also have a “second line of defence”: an internal control function that carries out evaluations and reviews and helps us learn from experience. This edition explores how continuous learning helps us adapt to evolving risks and priorities. Interested? Read the newsletter for the full picture. And subscribe to stay up to date with all things banking supervision.

Today is International Day against Homophobia, Biphobia and Transphobia 🏳️🌈🏳️⚧️ The theme of this year’s #IDAHOBIT is “at the heart of democracy”. Today reminds us of the importance of meaningful equity and justice to stand up for a truly democratic society, and how we can pave the way together for a better future for everyone. At the ECB we are raising the pride flag to stand with the LGBT+ community and reaffirm our commitment to diversity and inclusion in Europe and across the world #UnitedinDiversity