Rate hikes to help euro zone banks but war a drag – ECB

Rate hikes to help euro zone banks but war a drag – ECB

© Reuters. FILE PHOTO: People walk through the City of London financial district during warm weather in London, Britain, June 17, 2022. REUTERS/Henry Nicholls

(Reuters) – Euro zone banks will benefit from a gradual increase in interest rates but market volatility and the impact of Russia’s war in Ukraine could prove a drag, European Central Bank supervisor Andrea Enria said on Thursday.

“The current environment, however, is marked by increased volatility and lower equity valuations, as markets anticipate that the profitability and asset quality of banks may be affected by adverse macroeconomic developments,” he told a European Parliament committee hearing.

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