Eurozone banks must consider geopolitical risks – ECB’s Buch

Eurozone banks should account for geopolitical risks in their capital planning and business decisions, according to Claudia Buch, the European Central Bank’s top supervisor.

Speaking to European lawmakers on Monday, Buch highlighted the impact of geopolitical events on credit, liquidity, market, and operational risks, citing disruptions in value chains and third-party services.

“Banks must therefore use scenario analyses and factor uncertainties into their capital planning,” Buch emphasised.

She also suggested that banks might need to reassess their geographical exposures and outsourcing strategies to better manage these risks.