ECB meeting to exchange views on banking turmoil

The European Central Bank will hold talks on the state of banking in the eurozone on Friday amid contagion fears after the failure of two US lenders.

“The Supervisory Board is meeting to exchange views and to provide members with an update on recent developments in the banking sector,” an ECB spokesman said in a statement.

The meeting, the second of its kind this week, was not previously scheduled but is a common step in reaction to fast-moving developments in the banking sector.

No decision was expected out of the talks among around 20 participants chaired by Andrea Enria, head of the ECB Supervisory Board.

The central bank for the 20 countries using the euro on Thursday stuck to a planned half percentage point interest rate increase despite the market turmoil over fears of a widening banking crisis.

European policymakers had faced calls to slow their aggressive hiking campaign after the collapse of Silicon Valley Bank and Signature Bank in the United States, the sector’s biggest failures since the 2008 financial crisis.

Fears of contagion have spread to Europe, with a market rout forcing Credit Suisse to tap a financial lifeline from the Swiss central bank.

The ECB noted Thursday the eurozone’s banks were “resilient, with strong capital and liquidity positions”, and its president Christine Lagarde insisted the institution was poised to act if needed.

“We are monitoring current market tensions closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area,” she said.