Pressurised bank sales ‘could hurt eurozone’

The European Central Bank yesterday warned that record low interest rates were putting insurance firms and banks under increasing pressure and warned that any sell-off in stocks and bonds could damage the eurozone’s recovery.

In its twice-yearly Financial Stability Review, the ECB also said risks from Greece for the eurozone’s governments had “increased sharply” but that their borrowing costs and growth prospects were being helped by measures like the ECB’s bond-buying programme.

The negative side-effect of that, though, was the squeeze it was putting on insurance firms who are finding it increasingly difficult to find assets that pay out enough to cover their costs, and for banks in terms of their profitability.