Most significant international threats to stability relate to securities markets

Abstract

Investors’ optimism on the financial markets can rapidly turn to risk aversion if global economic or political uncertainty increases. Longer-term risks related to indebtedness and the housing markets are considerable, especially in emerging economies, although the Nordic countries, for example, are also vulnerable. The condition of the banking sector and public finances gives cause for concern particularly in some euro area countries. In addition, uncertainties regarding financial regulation have increased in the United States.