Euro zone banks have limited direct exposure to the war in the Middle East, but the conflict could still generate systemic stress given interconnected vulnerabilities, European Central Bank Vice President Luis de Guindos has said, Reuters reports.

Financial markets have come under stress in recent weeks from the impact of the US and Israeli war on Iran, but the selloff outside the Middle East has been limited, even as some assets remain overvalued.

“Spillovers to the euro area financial sector have so far remained contained,” de Guindos said in a speech.

“Direct bank exposures to the region are limited, and the banking system is well-positioned with strong profitability and robust capital and liquidity buffers.”

Opinion

Editorial

Diplomatic resolve
Updated 30 May, 2026

Diplomatic resolve

Iran, too, must engage seriously and provide credible assurances about its nuclear programme if it wants sanctions relief and a more stable relationship with the outside world.
Weaponising water
30 May, 2026

Weaponising water

CLIMATE Minister Musadik Malik’s warning against what he described as “water aggression” indicates ...
Rabies toll
30 May, 2026

Rabies toll

EVERY year, rabies, the deadliest zoonotic disease, kills more than 59,000 people worldwide. In Pakistan, it is one...
Pressure politics
Updated 28 May, 2026

Pressure politics

The attempt to connect the Iran conflict with the Abraham Accords makes little sense.
Eid’s true spirit
Updated 27 May, 2026

Eid’s true spirit

Pakistan celebrates Eid while grappling with economic strain that continues to weigh heavily on ordinary households.
Cotton crisis
Updated 29 May, 2026

Cotton crisis

We need a coherent long-term cotton strategy or else, Pakistan might lose a key pillar of its export economy.