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Financial Stability Review

European Central Bank, (2015), Financial Stability Review, Μάιος.

Euro area financial system stress has remained low over the past six months, despite a certain increase in global financial market volatility. Broad-based indicators of financial market and banking system risk have generally fluctuated at low levels and stood in mid-May around the marks observed before the outbreak of the sovereign debt crisis (see Chart 1). The low overall level of financial system stress in the euro area reflected an improving real economic outlook supported by ECB action allaying deflation fears that threatened to be harmful to both price and financial stability. Notwithstanding the generally positive financial market sentiment, intermittent bouts of market tension have continued to afflict global financial markets – spanning foreign exchange, commodities and, most recently, bonds. The recurrent incidence and amplitude of such bouts of market tension have suggested a tendency for pronounced sharp asset price sensitivity to investor sentiment.