ECB warns of ‘abrupt increase’ in bank funding costs

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By Tyler Davies
26 Nov 2020

The European Central Bank has warned that some banks face a sharp spike in the cost of their bond funding, as the economic fallout from the coronavirus pandemic begins to translate into credit rating downgrades.

Debt costs have declined “substantially” from their peak at the start of the coronavirus crisis this year, the ECB said in its Financial Stability Review (FSR) on Wednesday. 

Spreads on preferred senior and non-preferred senior bonds are just 15% and 5% higher respectively than where they stood ...

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