European Central Bank (ECB) Governing Council member Álvaro Santos Pereira issued a stark warning on November 21, 2025, arguing that sharp corrections in both U.S. financial markets and crypto assets now represent the most immediate threat to global financial stability. His remarks came during a turbulent week in which the S&P 500 approached its steepest decline since April, amplifying concerns about a broader risk-off shift.
Pereira emphasized that U.S. equities and digital assets appear significantly overvalued, describing these stretched valuations as a key short-term vulnerability. He also highlighted how developments in the United States tend to shape global financial conditions, noting that shifts in the dollar, trade flows, and funding costs can quickly spill into the Eurozone economy.
The ECB official underscored that central banks must preserve room to act if shocks begin to materialize. According to Pereira, the institution’s first responsibility remains “price stability,” and ensuring enough policy flexibility is essential as volatility rises.
Broader Market Concerns
The warning also ties into the ECB’s broader concerns about market concentration among a small group of powerful U.S.-based tech firms. Their deep interconnection with global markets, and their reliance on increasingly complex AI-driven business models, leaves the financial system exposed if any of these firms encounter stress or regulatory hurdles.
Pereira’s comments arrive just days before the central bank’s semiannual Financial Stability Review, which ECB Vice President Luis de Guindos is scheduled to present. The report is expected to expand on these risks, including the potential for contagion stemming from rapid growth in the dollar-denominated stablecoin sector.
Global Stability Implications
As global markets continue to react to tightening financial conditions, the ECB’s message is clear: turbulence in the U.S. and crypto markets is no longer a localized issue, it is a global stability concern.