A post by @FirstSquawk on X.

ECB executive board member Isabel Schnabel warned that the expanding non-bank financial sector and rising public debt levels could undermine the central bank's ability to control monetary conditions. The remarks highlight concerns that credit intermediation is shifting beyond the traditional banking system, where ECB oversight is weaker, while heavier sovereign borrowing may complicate the transmission of policy rates. The warning matters because it suggests the ECB's toolkit may be less effective if non-bank lenders and fiscal expansion blunt the impact of rate decisions. Traders will watch whether the ECB adjusts its monitoring of non-bank leverage and how euro-area governments' issuance plans evolve.