The eurozone’s non-bank financial sector is showing signs of increased risk-taking, the European Central Bank (ECB) says in its latest financial stability review.

Investment funds are “venturing further down the credit risk spectrum and into longer maturities” in response to the low yields on other instruments, the review said. Institutional investors are shifting from higher-rated to lower-rated debt securities, and into banking debt with lower seniority levels.

These trends have increased