Euro Area Policies: Financial System Stability Assessment

IMF Staff Country Reports, July 23, 2025

Source details

The euro area financial system "had proven resilient through multiple shocks, supported by significant bank capital and liquidity buffers."
The sector "is currently experiencing heightened volatility."
At the outset of the FSAP:
- "inflation was declining"
- "monetary policy easing"
- "economic recovery was gradually gathering strength"
Since the FSAP began:
- "geopolitical tensions and trade policy uncertainty have since clouded the outlook, amplifying financial market volatility."

"Nonbank financial intermediation (NBFI) has expanded rapidly, diversifying the financial landscape."
Market integration and depth remain constrained: "renewed efforts to create deeper and more integrated markets remain hindered by national fragmentation."

Subjects highlighted in the assessment:
- Anti-money laundering and combating the financing of terrorism (AML/CFT)
- Asset and liability management
- Crime
- Financial Sector Assessment Program
- Financial sector policy and analysis
- Financial sector stability
- Liquidity
- Stress testing
Keywords emphasized: AML/CFT, area financial system, euro area banking system, Europe, Financial Sector Assessment Program, Financial sector stability, FSAP finding, Global, infrastructure regulation, Liquidity, liquidity Risk metrics, market scenario, market volatility, Stress testing

Publication title: Euro Area Policies: Financial System Stability Assessment
Publication date shown on page: July 23, 2025
Format: IMF Staff Country Reports
Available actions indicated: Download PDF, More Formats on IMF eLibrary, Order a Print Copy, Create Citation, Share

International Monetary Fund — Euro Area Policies: Financial System Stability Assessment (July 23, 2025).