Reuters reports that the ECB's top supervisor Andrea Enria said that the ECB plans to come down on banks that are taking too much risk via financial instruments such as leveraged loans and equity-related derivatives.

Enria said there was evidence that despite the pandemic, banks had become complacent and risk-hungry after years of low rates and rising stock markets, pointing to a boom in the issuance of collateralised loans obligations, equity swaps and loans to already indebted clients.

"Concrete signs of risk build-up have in our view become apparent in the risky asset segments of leveraged debt and equity-related derivatives, which warrant intensified supervision," Enria said during an academic lecture via weblink.

He warned this bonanza may come to an end when pandemic-fighting public support measures are withdrawn or if investors start expecting inflation to accelerate and demand higher interest rates.