ECB Vice President Luis de Guindos said today that “as the euro area emerges from the third wave of the pandemic, risks to financial stability remain elevated and have become more unevenly distributed.”
As fiscal support is “gradually removed”, “considerably higher insolvency rates than before the pandemic cannot be ruled out, especially in certain euro area countries,” he added. “Extensive policy support, particularly for corporate, could gradually move from being broad-based to more targeted.”
He also noted that “the present level of yields permits that the financing conditions of the governments as well as… for households and corporates are favourable.”
The comments on yields came as Germany 10-year yield breaks above -0.1 level today, hitting the highest level since mid-2019.
