Preparing for geoeconomic fragmentation
· Christine Lagarde, President of the European Central Bank (Euro area (EU))
Summary written by Dark Majestic in its own words · topics: financial stability, trade, fragmentation and geopolitics
CL · Christine Lagarde Wiki · European Central Bank WikiPreparing for geoeconomic fragmentationContextOpening remarks by Christine Lagarde at a roundtable on geoeconomic shifts and dependencies at the Munich Security Conference.
Why it mattersTreats trade dependencies as a security risk that should be stress-tested.
Problems raised- Trade has become a security issue.
- Some products are hard to diversify or replace.
- Market stress could cause fire sales of euro assets.
Solutions proposed- Stress-test the effects of cut-off supply.
- Build domestic capacity in critical sectors.
- Prepare the ECB for a more volatile environment.
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