The European Central Bank (ECB) issues new warnings on unprecedented financial risks impacting eurozone banks, including market volatility, geopolitical tensions, and non-bank vulnerabilities. Explore the ECB’s latest supervisory measures, reverse stress testing, capital requirements, and strategic recommendations for long-term financial stability. Latest ECB Warnings The ECB cautions that the financial system is facing “unprecedented shocks”, noting that the current environment is highly unpredictable and may expose banks to crisis scenarios that have never previously occurred. Key risk areas identified include: ECB: Next Steps 1. Introduction of a New “Reverse Stress Test” Approach 2. Strengthened Expectations for Banks The ECB advises…