European Financial Stability Amid U.S. Tariff Tensions

The Bank of Spain's head of supervision, Mercedes Olano, states that while the effects of new U.S. tariffs are not yet clear, European supervisors are closely monitoring the situation. No liquidity issues have been observed in European lenders. The European Central Bank has also ramped up its surveillance of eurozone banks amidst market tensions.

Mercedes Olano, the head of supervision at the Bank of Spain, expressed that it's premature to assess the impact of newly imposed U.S. tariffs. However, European supervisors are diligently observing the situation, and so far, European banks' liquidity remains unaffected.

Olano emphasized the ongoing vigilance of the Bank of Spain in collaboration with the Single Supervisory Mechanism (SSM), maintaining a watchful eye for potential repercussions of the tariffs on the global financial system.

Simultaneously, inside sources have told Reuters that the European Central Bank has heightened its scrutiny of eurozone banks and bond markets due to the trade war-induced volatility in global stocks, yet there is no major cause for concern currently.

(With inputs from agencies.)