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Date Ref. Title Section Type Download Info Summary Related Documents Translated versions
05/05/2015 JC/2015/02 ESAs- main risks to EU financial market stability have intensified Risk Analysis & Economics - Markets Infrastructure Investors, Press Releases, Joint Committee Press Release PDF
125.34 KB		 The Joint Committee of the European Supervisory Authorities (ESAs) published its fifth Report on Risks and Vulnerabilities in the EU Financial System. Overall, the report found that in the past six months, risks affecting the EU financial system have not changed in substance, but have further intensified. The EU’s economic performance improved slightly in early 2015, however the financial sector in general continues to be affected by a combination of factors such as low investment demand, economic uncertainty in the Eurozone and its neighbouring countries, a global economic slow-down and a low-interest rate environment. The main risks affecting the financial system remain broadly unchanged from those identified in the report’s previous edition, but have become more entrenched. The major risks include: • Low growth, low inflation, volatile asset prices and their consequences for financial entities; • Search for yield behaviour exacerbated by potential rebounds; • Deterioration in the conduct of business; and • Increased concern about IT risks and cyber-attacks. Despite these risks, a number of ongoing policy and regulatory initiatives are contributing to improving the stability and confidence in the financial system as well as facilitating additional funding channels to the real economy. These include ongoing regulatory reforms in the securities, banking and insurance sectors such as the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR), the work on the implementation of the Capital Requirements Directive and Regulation (CRDIV/CRR), the work on the Bank Recovery and Resolution Directive (BRRD), the Deposit-Guarantee Schemes Directive (DGS) and the Solvency II Directive, as well as the European Commission’s plan for a Capital Markets Union (CMU). Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA) and the current Chairman of the Joint Committee, said: “The Joint Committee has noted some improvement in overall market conditions; however, the recovery is not yet sustained and is exposed to risks related to broad macroeconomic conditions, in particular the low interest environment and resulting search-for-yield behaviour. Additionally regulators continue to have concerns about the operational risks generated by some financial institutions’ inappropriate business conduct, as well as those risks posed by inadequate management of IT risks. “However, recent regulatory initiatives across the banking, insurance and securities sectors, such as the Comprehensive Assessment, the insurance sector stress test and Solvency II along with, the ongoing MiFID, EMIR and PRIPS reforms are contributing to improving the stability and confidence in the EU financial system." Key Risks Identified The identified risks in the Report can be divided into macro risks to the EU financial system and economy and operational risks. Macro Risks The key macro risks identified relate to: 1. Risks from weak economic growth and low inflation environment, which include: • Adverse effect that low interest rates and uncertainties about the economic recovery have had on the outlook for the financial industry; • Higher valuation and market liquidity risk has raised concerns about the outlook for financial entities’ stability in the event of reversals in interest rates and asset prices; 2. Low profitability is motivating financial institutions and other investors to search for yield, which requires increased supervisory attention to the viability of business models, related restructuring activity and adequate management of risks. However, the promotion of sound and innovative business models for market-based funding structures could help to deliver additional stimulus; and 3. Some continued doubts on the comparability and consistency of banks’ calculations of risk weighted assets. Operational Risks The key operational risks relate to: 4. Business conduct risk remains a key concern with the Report recommending that supervisors should include misconduct costs in future stress tests where appropriate, while financial institutions should strengthening product oversight and governance frameworks. Further improvements in the regulatory framework and supervisory practices to address conduct risks are also warranted. In addition, further progress needs to be made on benchmark reforms where continuity and integrity remain a source of concern even if key panels remained stable; and 5. IT operational risk and cyber risk remain of great concern and pose challenges to the the safety and integrity of financial institutions. IT risk increased due to costs pressures, outsourcing, the need for additional capacities and a mounting number of cyber-attacks. The adequate integration of IT risk into overall risk management is a key policy for mitigation.
15/11/2000 Fesco/99-127 1999-2000 Report on the activities of FESCO CESR Archive Annual Report PDF
378.9 KB
24/08/2021 ESMA74-362-2048 Consultation paper and draft RTS management body DRSPs Market data Consultation Paper PDF
294.51 KB
28/05/2021 ESMA74-362-1941 Consultation Paper on the Guidelines on transfer of data between Trade Repositories under EMIR and SFTR Market data, Securities Financing Transactions, Trade Repositories Consultation Paper PDF
658.69 KB
13/07/2021 ESMA74-362-1893 Consultation Paper Guidelines EMIR REFIT Market data Consultation Paper PDF
3.11 MB
24/03/2021 ESMA74-362-1864 CP Technical Advice on simplification TR fees under SFTR and EMIR Market data, Trade Repositories Consultation Paper PDF
494.16 KB
05/07/2018 ESMA71-99-999 SMSG Renewal July 2018 Press Release Press Releases, Securities and Markets Stakeholder Group Press Release PDF
146.18 KB
12/09/2017 ESMA71-99-577 ESMA sees valuation risk at highest levels due to financial weakness and geopolitical uncertainty Press Releases, Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
131.39 KB

The European Securities and Markets Authority (ESMA)’s latest report on Trends, Risks and Vulnerabilities No. 2, 2017 (TRV) identifies high asset price valuations as the major risk for European financial markets in the second half of 2017. The main risk drivers are uncertainties around geo-political developments, the resilience of economic growth as well as debt sustainability. Market and credit risks, as a result of geopolitical, growth and debt concerns, continued to be very high, while liquidity and contagion risks remained stable but high. Operational risk remains elevated but the outlook is now negative due to heightened concerns around cyber security. Overall, ESMA’s risk assessment for the second half of 2017 remains unchanged from 1H17.
20/03/2017 ESMA71-99-371 Press release TRV No. 1, 2017 Press Releases, Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
226.09 KB
15/02/2022 ESMA71-99-1832 ESMA warns consumers of risk of significant market corrections Press Releases, Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
132.5 KB
28/10/2021 ESMA71-99-1752 Press Release- ESMA addresses investment recommendations made on social media platforms Market Integrity, MiFID - Investor Protection, Press Releases Press Release PDF
445.71 KB
01/09/2021 ESMA71-99-1720 ESMA sees risk of market corrections in uneven recovery Press Releases, Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
91.28 KB
15/04/2021 ESMA71-99-1651 ESMA highlights need for increased efforts on EMIR and SFTR data quality Market data, Press Releases, Securities Financing Transactions, Supervisory convergence Press Release PDF
85.72 KB
14/04/2021 ESMA71-99-1637 Retail clients continue to lose out due to high investment products costs Fund Management, Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
105.12 KB
26/03/2021 ESMA71-99-1624 ESMA ADVISES ON FRAMEWORK FOR DATA REPORTING SERVICE PROVIDERS Market data, Press Releases Press Release PDF
84.4 KB
17/03/2021 ESMA71-99-1579 ESMA sees high risk for investors in non-regulated crypto assets Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
98.02 KB
18/11/2020 ESMA71-99-1437 ESMA publishes first overview of the size and structure of EU securities markets Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
93.67 KB
16/11/2020 ESMA71-99-1436 EU derivative clearing showed strong growth in 2019 Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
94.57 KB
02/09/2020 ESMA71-99-1375 ESMA sees high risk of decoupling of financial market performance and underlying economic activity Risk Analysis & Economics - Markets Infrastructure Investors Press Release PDF
127.82 KB
16/06/2020 ESMA71-99-1349 ESMA Press Release SMSG 2020 Board of Supervisors, Press Releases, Securities and Markets Stakeholder Group Press Release PDF
102.88 KB

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