ECB Cautions That Fluctuations in Tech and Crypto May Trigger a Market Crash Similar to 2000
- ECB warns U.S. tech and crypto volatility risks triggering a 2000-style market crash, citing sharp asset corrections and AI-driven valuation fragility. - ECB officials stress central banks must retain rate-cut flexibility amid rising risks, as crypto outflows and equity inflows highlight market divergence. - JPMorgan analysis flags crypto panic-selling risks spilling into broader systems, while MSCI warns a 63% sector collapse could follow AI confidence loss. - ECB and BIS caution stablecoin growth threa
The European Central Bank (ECB) has issued a warning about escalating threats to global financial stability, cautioning that abrupt downturns in U.S. tech shares and the cryptocurrency sector could spark a crisis similar to the dot-com crash of 2000. Alvaro Santos Pereira, a member of the ECB's Governing Council and head of Portugal's central bank, stressed the importance of central banks maintaining the ability to swiftly lower interest rates should turmoil arise. His comments come at a time when
Central banks are also contending with the expansion of stablecoins, which have come under scrutiny for their potential to disrupt established financial systems. Lorenzo Bini Smaghi, a former ECB executive board member, warned that Europe’s slow progress in launching euro-based stablecoins
The Bank for International Settlements (BIS) has voiced similar concerns, warning that
With markets awaiting ECB President Christine Lagarde’s forthcoming address,
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