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The European Central Bank (ECB) released its Financial Stability Review on Wednesday. The central bank said that the impact on the Eurozone's financial stability from interest rates hikes abroad is limited.
"Highly indebted foreign-currency borrowers may be vulnerable to a prospective normalisation of financial conditions in the United States and other advanced economies. Euro area banks have limited direct exposure to emerging market economies outside Europe," the report said.
But there are risks from a faster-than-expected interest rate hikes in the U.S.
"Risks to the growth outlook remain slightly on the downside and relate to a faster than expected normalisation of interest rates and a further appreciation of the US dollar," the report say.
The ECB Vice President Vitor Constancio said in a press conference today that a level of systemic risk in the Eurozone is low.
He noted that the ECB has not made a decision regarding further stimulus measures.
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