FRANKFURT--The European financial system faces some risks from emerging markets, particularly China, even as markets overcame a series of shocks during the second half of 2015, the European Central Bank said Wednesday.
"The euro area financial system weathered challenges on several fronts in the second half of the year," the ECB said in its twice-yearly Financial Stability Review, citing risks surrounding Greece's debt negotiations over the summer and a correction in Chinese stock markets.
"The impact on the euro area financial system of these developments has been relatively contained, with standard indicators of bank, fiscal and financial stress remaining at low levels," the ECB said.
Still, it warned that emerging markets pose risks to markets.
"Occasional bouts of financial market volatility suggest that vulnerabilities stemming from emerging markets are increasing. Of particular concern is the outlook for China, given its growing role in the world economy," the ECB said.
Write to Brian Blackstone at brian.blackstone@wsj.com
