The European Central Bank has raised its interest rates by 50 basis points, despite warning that European Union banks could be vulnerable to further rate hikes.
On Tuesday (14 March), ECB vice president Luis de Guindos warned finance ministers that some European Union banks may be vulnerable to rising interest rates, according to Bloomberg reports.
The revelation of the warnings was published just half an hour before the ECB published its latest monetary policy decisions, in which the bank chose to forge ahead with its programme of rate hikes.
De Guindos spoke at the regular Ecofin meeting in the wake of the Silicon Valley Bank fallout, arguing that while EU lenders are much less exposed to the crisis than US counterparts, he could not rule out the risk to some lenders as a result of their business models.
He cautioned against complacency and warned that a lack of confidence may trigger contagion.
The meeting came before the collapse in Credit Suisse's share price on Wednesday morning (15 March) and subsequent loan agreement with the Swiss National Bank this morning (16 March).
