Press release of the Banco de Portugal on the May 2023 issue of the Financial Stability Report

Over the past few months, risks to financial stability have been in line with the tense geopolitical environment, inflationary pressures and the relative turmoil in international financial markets, triggered by recent developments in US and Swiss banks. Despite reflecting idiosyncratic weaknesses, events in these institutions have resulted in a generalised uncertainty framework that warrants increased monitoring by authorities. The European Central Bank has continued its cycle of interest rate hikes, despite a recent deceleration, and has signalled its ability to support liquidity in the euro area banking sector, if needed, and to preserve monetary policy transmission.