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ESMA Risk Dashboard

ESMA Risk Dashboard

In 1Q17, risks in the markets under ESMA remit remained at high levels, reflecting very high risk in securities markets, and elevated risk for investors, infrastructures and services. Our assessment of the individual risk categories did not change from 4Q16, with market and credit risk remaining very high due to the persisting low-interest rate environment, continued weaknesses in the EU banking sector and geopolitical developments. Liquidity risk is still assessed as high, with liquidity pressures in segments of the fund industry and in repo markets. Contagion risk remained high, driven by high levels of interconnectedness between different segments of financial markets amplified by the low-yield environment and associated incentives for risk-taking. Finally, operational risk remained a key concern. The risk outlook is stable across all risk categories, reflecting the stabilised macroeconomic environment and the non-materialisation of risk premia reversals following recent US monetary policy actions.