On 25 May 2022, the European Central Bank published its half-yearly Financial Stability Review. It gives an overview of potential risks to financial stability in the euro area. According to the Review, the war in Ukraine has increased the risks to financial stability. The Review’s key conclusions are:

• Higher inflation, slower growth and less favourable financing conditions could challenge the debt sustainability of individual countries, households and companies.
• Overall, the banking sector is in a position to cope with second-round effects from the war. So far, the financial markets have responded more moderately than they did at the beginning of the Covid-19 pandemic.
• It makes sense to further enhance resilience through macroprudential measures, taking country-specific circumstances into account.