ECB/Knot: The Impact of Rapid Rate Hikes on the Financial Sector Could Have Been Much Worse

Klaas Knot, a member of the European Central Bank's Governing Council and President of the Dutch Central Bank, stated that rapid interest rate hikes could have a far more negative impact on the banking sector. Speaking at the Santander International Banking Conference in Madrid, he mentioned that "as we enter a new situation of increased turbulence, banks actually form the core of the financial system, and they are managing it quite well." Regarding new challenges and opportunities, Knot noted that the Financial Stability Board is focusing on artificial intelligence and tokenization. He expressed belief that, although these two topics are 'not yet realized,' they hold significant potential. "We think that artificial intelligence has great opportunities to create more operational efficiency within financial institutions," he added.