MADRID (Reuters) – European Central Bank Vice President Luis de Guindos said on Monday that euro zone banks will have to increase provisions to cope with the effects of the economic slowdown caused by the fallout from the Russian war in Ukraine.
“The economic slowdown will lead to a potential increase in insolvencies (…) we are already trying to get the banks to present their plans because it will undoubtedly have an impact,” de Guindos said.
“Let’s not lose sight of the short-term impact, the banks will have to increase provisions,” he added, acknowledging the short-term support for banks from higher interest rates.
