Debt and non banks risk limiting ECB policy

Rising public debt and expanding non-bank finance could constrain European Central Bank monetary policy. ECB board member Isabel Schnabel warns that higher debt costs and leveraged investors threaten financial stability and urges stronger regulation.

FILE PHOTO: Member of the Executive Board of the European Central Bank Isabel Schnabel enters the morning session at the ECB Forum, in Sintra, Portugal June 30, 2026. REUTERS/Pedro Rocha/File Photo

Rising public debt and the rapid expansion of non-bank finance threaten to constrain the European Central Bank in setting monetary policy, ECB board member Isabel Schnabel said.