欧洲央行副行长路易斯·德金多斯（Luis de Guindos）在报告前言提到，金融市场的潜在脆弱性仍然很大，尤其是“估值过高和风险集中”，这使得进一步的波动会比往常更有可能发生。① The European Central Bank's "Financial Stability Report" warns of significant potential vulnerabilities in financial markets, particularly "overvaluation and concentration of risk," which may lead to further volatility. ② The report points out that high valuations and risk concentration make financial markets susceptible to sudden, severe adjustments, especially in the stocks market. ③ Investors may have underestimated the probability and impact of adverse scenarios.
On Wednesday local time (November 20), the European Central Bank released the November "Financial Stability Report."
As part of the financial stability review, the European Central Bank publishes two "Financial Stability Reports" each year. In this report, the bank lists a series of risks ranging from war and tariffs to cracks in the banking system pipeline, and issued a warning about the "bubble" in ai-related stocks.
Luis de Guindos, Vice President of the European Central Bank, mentioned in the report's preface that the potential vulnerabilities in financial markets remain significant, especially "overvaluation and concentration of risk," which makes further volatility more likely than usual.
The report states that high valuations and risk concentration make financial markets susceptible to sudden, severe adjustments, especially in the stocks market. Although the stock market has recently quickly absorbed tail events, the potential vulnerabilities make it prone to similar events happening in the future.
"There are signs that investors may have underestimated the probability and impact of adverse scenarios, as indicated by record low stock risk premiums and the relatively compressed corporate bond spreads on both sides of the atlantic (Europe and the USA)."
The European Central Bank pointed out, "In recent years, the market cap and earnings concentration of a few companies (especially in the USA) have significantly increased, raising concerns about the potential for price bubbles in ai-related assets."
The report specifically highlighted the "seven giants" in a diagram.$S&P 500 Index (.SPX.US)$The proportion of market cap. The report suggests that in the context of a deeply integrated global equity market, if these companies' earnings expectations fail, this bubble may suddenly burst, leading to adverse spillover effects globally.
Therefore, if negative surprises occur, such as a sharp deterioration in economic growth prospects, a sudden shift in monetary policy expectations, or the further escalation of ongoing geopolitical conflicts, investor sentiment may more easily shift dramatically, resulting in spillover effects on various assets.
The European Central Bank points out that the concentrated risk exposures, liquidity mismatches, and high leverage of financial institutions may exacerbate adverse market dynamics, and shortages of cash may force them to sell assets, worsening the downward adjustment of asset prices.
The report also states that the eurozone is particularly susceptible to the impact of a "rollback of trade integration," which has been one of the biggest concerns for policymakers and investors since Trump won the USA presidential election earlier this month.
During his campaign, Trump repeatedly mentioned that if he were re-elected, he planned to impose tariffs of 10% to 20% on all goods imported into the USA. Several European Central Bank policymakers stated that these measures, if implemented, would harm the eurozone's growth.
The European Central Bank also noted that some member states—especially Italy and France—would borrow at much higher interest rates over the next decade, reinforcing the necessity for prudent fiscal policies.
Editor/rice
