The euro area’s markets could see “stressed liquidity” due to heightened economic uncertainty, monetary policy normalization and tighter financial conditions, according to the European Central Bank. In a report released ahead of Wednesday’s financial stability review, the central bank highlighted the region’s market and funding liquidity conditions deteriorating simultaneously since early 2022. This is unusual and indicators suggest market liquidity is now as low as during the onset of the pandemic in early 2020, it said. The trend comes as central banks reduce the accommodative monetary policy and large bond ... (full story)