Russia’s invasion of Ukraine added another one to a series of crises affecting Europe over the last decade and a half. This column finds that fragmentation of euro area financial markets has been relatively limited, as policymakers have benefitted from reforms after and experiences with past crises, European countries and authorities reacted with quite some unity, and direct financial exposures to Russia and Ukraine are relatively small. Cross-country divergences of euro area asset prices appear to have been particularly driven by bond markets and related to the countries with the greatest energy and financial exposures as well as to changes in economic uncertainty.
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