Financial institutions are advised to strengthen their defences against credit and liquidity risks as the full impact of the European Central Bank's historic rate hike has yet to be felt, Bundesbank vice president Claudia Buch said. "Financial institutions should take advantage of the current positive earnings situation to improve their resilience," Buch said in prepared remarks ahead of the International Monetary Fund's annual meetings in Marrakesh. She argued that "the sharp rise in interest rates has exposed the fragility of the financial system, although the full impact of the rate hike has yet to be felt," adding that "credit and liquidity risks are likely to rise."