Chairman of Crdit Mutuel Caisse de France: Conflict in Iran may trigger a new round of inflation shock, European banks face risks.

Against the backdrop of ongoing tension in the Middle East and a significant rise in energy prices, the European banking industry is facing new macro risks. Daniel Baal, the chairman of Crdit Mutuel in France, stated that the biggest threat posed by the Iran war is the possibility of rapid energy price increases triggering new inflation shocks, putting pressure on the banking sector's operating environment. Baal said on Thursday that there is still great uncertainty in the market regarding the scale and duration of the conflict. "We are completely uncertain about the scope and duration of the conflict at the moment," he said. "Therefore, what I am most concerned about now is the emergence of new inflation shocks and the adverse impact of interest rate trends on banking operations." The Middle East conflict has caused a surge in energy prices, leading to widespread inflation concerns in Europe. Earlier this week, Peter Kazimir, a member of the European Central Bank's Executive Board, said that in light of rising energy prices, the ECB may raise interest rates sooner than previously expected. Political uncertainty from the GEO Group Inc has also impacted European bank stocks. Data shows that European bank stocks have overall performed weakly this year, with most banks experiencing declines. Bank of America Corp's sector has also shown a weakening trend, with JPMorgan Chase falling by 2.4%, Morgan Stanley by over 4%, Goldman Sachs Group, Inc. by over 3.7%, Bank of America Corp by over 2.7%, and Citigroup by nearly 4%. At the forum, Baal also called for the EU to accelerate the integration of financial services markets to enhance the European financial system's ability to respond to new challenges. He also suggested that there should be some relaxation in the new regulatory framework Basel III for the banking industry to ease capital pressure. Baal noted that a significant amount of savings funds in Europe are flowing into the US market every year. He said, "Around 300 billion of savings funds flow from Europe to the US annually." At the same time, many large French and European companies are increasingly relying on Bank of America Corp for financing. In his view, this situation reflects an imbalance in the global financial competitive environment. "European banks face stricter capital regulatory constraints, especially in almost fully implementing Basel III rules, while the UK and Bank of America Corp have not implemented these requirements to the same extent," he said, pointing out that this has somewhat weakened the competitiveness of European banks in the international market.