Financial Stability Report No. 1 - 2015

The global risks for financial stability are subsiding, but areas of vulnerability remain. The emerging economies in particular are exposed to the repercussions of the possible rise in official interest rates in the United States and a further appreciation of the dollar. The decline in the price of oil could impact on the sustainability of the oil producing countries’ debt.

In the euro area, the risks generated by low growth and very low inflation have diminished following the start of the Eurosystem’s asset purchase programme, which will also reinforce the member states’ capacity to sustain their debt. However, the situation in Greece constitutes a potential factor of instability. The Eurosystem stands ready to cope with the effects of an aggravation of tensions, but if the situation should deteriorate the consequences would be difficult to foresee.

The financial situation of households in Italy is sound. Firms’ profitability declined, but the outlook is improving, if quite unevenly between categories. The cyclical slackness of the economy weighs on credit quality and banks’ profitability, but intermediaries’ capital ratios are still rising. An extended period of low interest rates would have only limited impact on the balance sheets of banks and insurance companies.