ECB official warns of financial marekt risks, sharp pullback threatens financial stability

A sharp pullback in financial marekts and crypto assets would rank among the top short-term risks to financial stability, ECB Governing Council member Pereira warned. He said the central bank must reserve room to act in the event of another shock, stressing that "price stability is the top priority". "In the event of another shock or crisis, the central bank must have the cushion to act decisively to lower interest rates and help the economy," he said. "Monetary policy is appropriate at the moment," he added. His comments come after a tumultuous week for markets, with the S & P 500 heading for its biggest decline since April, Treasury yields falling and other risk assets pulling back. Markets stabilised on Friday after a Federal Reserve official suggested another rate cut was still possible.