ECB warns of financial turmoil as populism adds to Asia risks

Frankfurt

THE European Central Bank (ECB) warned that risks of financial-market turmoil have increased amid slower growth in emerging economies, weak bank profitability and the rise of populist movements across the 19-nation euro region.

The ECB wrote in its twice-yearly Financial Stability Review on Tuesday: "A sharper-than-expected fall in Chinese growth could well lead to a synchronised downturn across other emerging-market economies, particularly commodity-exporting economies. Under such a scenario, the financial systems of advanced economies may be challenged by a reduction in consumer and business confidence, and renewed financial-market volatility potentially intensified by sudden stops in or reversals of cross-border capital flows."