European Union flags fly outside the European Commission headquarters in Brussels, Belgium, April 10, 2019. REUTERS/Yves Herman
Reuters: Beware of wartime fake news triggering a run, EU banks told
LONDON (Reuters) - Banks should beware of fake news that could trigger a run on their deposits, the European Union's banking watchdog said in a warning on Friday about potential fallout from the war in Ukraine.
"As market sentiment remains highly volatile and driven by news flow, banks' liquidity levels can become vulnerable due to spread of inaccurate information," the European Banking Authority said in its latest "risk dashboard", which focused on exposures to Russia and Ukraine.
"Such campaigns that spread inaccurate information may result in deposit outflows from targeted banks," EBA said.
EBA said exposures of banks in the bloc to Russia are too low to threaten financial stability, but economic fallout from the war in Ukraine and cyber attacks could hit the profitability of lenders.
EU banks had exposures totalling 76 billion euros ($84 billion) to Russia and 11 billion euros to Ukraine in the fourth quarter of 2021, mainly among Austrian, French and Italian lenders.
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WNU Editor: I am not worried about fake news triggering a bank run. I am more worried about real news triggering a bank run.