ECB’s Stournaras: Chance of contagion to EU banks “very small”

ATHENS (Reuters) – The European banking system is well-equipped with capital and the probability of contagion due “very small”, ECB’s policymaker Yannis Stournaras said in an interview with CNBC on Monday.

“We don’t see substantial vulnerabilities. So, the probability of contagion is very small today. The banks are well capitalised,” Greek central bank chief Stournaras said.

Stournaras added that Europe has all the instruments ready, if needed, to intervene.

Answering a question on how vulnerable some EU banks are to rising interest rates, he said: “I think the rate hikes are mostly now a story of the past.”

“I think we are close to the end of the tightening cycle, so, to be honest, I do not believe that there is going to be a problem, in the Greek or in the European banking system.”

(Reporting Angeliki Koutantou and Lefteris Papadimas; Editing by Kevin Liffey)