High levels of debt and the rise of non-bank financial institutions could restrict the European Central Bank’s ability to respond to future economic and financial pressures, Schnabel has warned.
The comments highlight concerns over the combination of heavy borrowing and a growing role for lenders and investors outside the traditional banking sector.
Schnabel said the developments risk “tying” the ECB’s hands, potentially limiting its room for manoeuvre as it seeks to manage risks across the eurozone economy.
