Euro zone banks face only a limited direct impact from the war in Iran, but the larger danger lies in how a weakened economy might feed back into lenders’ balance sheets, a senior European Central Bank supervisor told Reuters. In a wide-ranging interview, Pedro Machado addressed concerns stretching from Middle East tensions to the recent wobble in private markets, while warning that a boom in complex securitisation deals merits closer scrutiny. The threat of a broader conflict in the Middle East has sharpened fears of another inflation burst and renewed pressure on growth in the euro zone, which depends on Gulf suppliers for some of its gas and on Suez Canal routes for Asian goods.