India, May 16 -- The European Central Bank said the financial stability conditions improved as recession risks declined but cautioned that financial markets remain vulnerable to further adverse shocks.
In its bi-annual Financial Stability Review, released Thursday, the ECB said the financial stability benefited from an improving economic outlook with easing inflation and recovering investor sentiment.
That said, the ECB noted that the outlook remains fragile as the scope for economic and financial shocks is high in an environment of elevated geopolitical and global policy uncertainty.
ECB Vice-President Luis de Guindos said, "Geopolitical risks continue to cloud the outlook for financial stability."
"While financial stability conditions...