European banks face stress tests as geopolitical tensions hit record levels

European lenders are resilient enough to absorb current financial and geopolitical ‌shocks but need to prepare for future uncertainties including cybersecurity risks from AI, François-Louis Michaud, the new head of the European Banking Authority, said.

Banks’ ability to absorb big shocks has come into focus as financial markets come under strain ​from the US and Israeli war on Iran. The European Central Bank last month warned that ​markets were underpricing