04Euro area · Finance and technology
The ECB warns that AI exuberance can travel through shadow banking
Facts
ECB Vice-President Boris Vujcic identified elevated AI valuations, sovereign-bond stress and losses at investment funds as the main financial-stability risks; the formal review is due 18 November.
InterpretationThe central bank can monitor liquidity, but it cannot repair bad fiscal policy or make speculative AI returns materialize. Europe’s vulnerability lies in transmission through funds and sovereign yields, not simply in US technology shares falling.