FRANKFURT, Germany (AP) — The European Central Bank says that challenges to financial stability in the eurozone have risen amid risks to economic growth from trade tensions, and warns that indebted governments such as Italy could run into trouble if they don't heed rules limiting debt and deficits.

The warning in an ECB report released Wednesday comes as Italy's populist government is challenging the debt rules, saying they are a hindrance to growth and setting up continued conflict with the EU's executive commission.

The ECB said that "should downside risks to growth materialize, financing costs for vulnerable sovereigns are likely to increase and may increase debt sustainability concerns."

The ECB also warned that the banking system faces challenges including weak profitability and the failure to cut costs.