LONDON, May 28 (Reuters) - Low economic growth and rising asset prices pose a risk to financial stability in the euro zone, the European Central bank said on Thursday.
“Set against increasing financial risk-taking, economic risk-taking in the euro area is still lagging,” the ECB said in its regular Financial Stability Review.
“Despite...signs of improving economic conditions, the risk of continuing low nominal growth remains a challenge to financial stability in the euro area.”
The central bank said low nominal growth could raise concerns about the sustainability of sovereign and corporate debt.
The ECB also highlighted the expansion of the shadow banking sector, which is comprised of non-bank lenders, and weak profits for banks and insurers as two further risks to euro zone financial stability. (Reporting By Marc Jones, Writing by Francesco Canepa; Editing by Hugh Lawson)