Exclusive-Euro zone banks face multiple threats from Iran war, ECB supervisor says

try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry Oil prices jump over 4% as Middle East war escalates, fuels supply fears Iran conflict latest: Hegseth says Iran conflict has "only just begun" Gold prices rebound from previous session’s hefty drop, helped by weaker dollar Nasdaq ends more than 1% higher as solid economic data lifts spirits (South Africa Philippines Nigeria) Exclusive-Euro zone banks face multiple threats from Iran war, ECB supervisor says By Economy Published 03/05/2026, 01:04 AM Updated 03/05/2026, 01:06 AM Exclusive-Euro zone banks face multiple threats from Iran war, ECB supervisor says 0 By Francesco Canepa FRANKFURT, March 5 - Euro zone banks face only a limited direct impact from the war in Iran, but the larger danger lies in how a weakened economy might feed back into lenders’ balance sheets, a senior European Central Bank supervisor told Reuters. In a wide-ranging interview, Pedro Machado addressed concerns stretching from Middle East tensions to the recent wobble in private markets, while warning that a boom in complex securitisation deals merits closer scrutiny. The threat of a broader conflict in the Middle East has sharpened fears of another inflation burst and fresh pressure on growth in the euro zone, which depends on Gulf suppliers for some of its gas and on Suez Canal routes for Asian goods. Machado, one of the ECB’s top bank watchdogs, said euro zone banks’ direct exposure to Iran and Israel was small relative to their ability to absorb losses at 0.7% of core capital for assets, such as loans, and 0.6% for liabilities like bank bonds. "Even if you include neighbouring countries, the exposures are pretty contained, representing slightly less than 1% of supervised entities’ total assets," he said in an interview. Large euro zone banks have assets worth 27.8 trillion euros ($32.32 trillion), according to the latest ECB data, meaning 1% of that would be worth 278 billion euros. The more consequential risk, Machado added, lies i...