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ECB's Schnabel sees 'disconnect' between stock market valuations and geopolitics

BY Reuters | ECONOMIC | 05/07/26 03:06 PM EDT

LONDON, May 7 (Reuters) - European Central Bank board member Isabel Schnabel said on Thursday that there appeared to be a disconnect between record stock market valuations and the risks facing the global economy.

"There really seems to be a kind of disconnect," she said at an event at the London School of Economics. "One could question whether ... markets are possibly a bit complacent here," about the impacts of the Iran conflict.

Schnabel said markets appeared to assume that damage to energy supply chains from the Iran war would be rapidly reversed - something she viewed as unlikely - and had very optimistic expectations for productivity gains from artificial intelligence.

* She also touched on concerns around the private credit sector. She said it was too small for now in Europe to bring systemic risk.

* There needs to be greater transparency on the sector though before it reaches a systemic scale. (Reporting by David Milliken; editing by Marc Jones and Chizu Nomiyama)

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