Xinhua Agency, Frankfurt, November 20 (Reporter Shan Weiyi) The European Central Bank released the latest financial stability assessment report on the 20th, showing that against the background of increasing geopolitical uncertainty and sluggish economic performance, sovereign debt risks of euro zone countries are rising, which in turn threatens financial stability.

European Central Bank Deputy President Luis de Guindos said that intensifying macro financial and geopolitical uncertainty, coupled with rising uncertainty in trade policies, has cast a shadow on the prospects for financial stability in the euro zone.

The report said that although the ratio of sovereign debt to GDP in euro zone countries has declined after the epidemic, the fiscal fundamentals of some member countries are still weak. As some countries 'debt levels rise and budget deficits remain high, coupled with weak long-term growth prospects and policy uncertainty, markets may become increasingly concerned about the sustainability of member states' sovereign debt.

The report believes that the overall credit risk in the euro zone is in a gradual upward trend. If economic growth slows more than currently expected, European small and medium-sized enterprises and low-income households will face greater economic pressure, which may adversely affect the asset quality of financial intermediaries in the euro zone.

The report calls on relevant financial regulators to remain vigilant about financial stability risks, maintain existing capital buffer requirements, ensure sound lending standards, and introduce policy measures to increase the resilience of non-bank financial institutions.

The European Central Bank releases a financial stability assessment report every six months.