FRANKFURT (MNI) – The European Systemic Risk Board, which is
chaired by the president of the European Central Bank, warned on
Wednesday that risks to the stability of the European financial system
have risen “considerably” since it last met in June and that there is
now a growing risk that the Eurozone debt crisis will spread across the
EU and globally.

“Since the previous ESRB General Board meeting on 22 June 2011,
risks to the stability of the EU financial system have increased
considerably,” the ESRB said in a written statement.

The “key risks,” it said, are weakening growth prospects in Europe
and worldwide, as well as a possibility that the sovereign debt crisis
could impinge further on the ability of banks to fund themselves.

“The high interconnectedness in the EU financial system has led to
a rapidly rising risk of significant contagion,” the statement
continued. “This threatens financial stability in the EU as a whole and
adversely impacts the real economy in Europe and beyond.”

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