The European Securities and Markets Authority has published its first 2025 risk monitoring report, concluding that overall risks in EU securities markets are high and warning market participants to guard against potential market corrections. The report highlights uncertainty around economic growth, global monetary policy and geopolitics, alongside rising contagion risk amid surging asset prices, record-high crypto markets and increasingly frequent and sophisticated cyber-attacks. Covering developments in the second half of 2024, the report notes weakening momentum in market-based corporate finance, with equity issuance remaining weak and corporate bond issuance easing slightly while staying near historically high levels. It flags debt sustainability risk ahead of a 2025–2028 corporate bond maturity wall, with 47% of debt maturing in that period. In sustainable finance, it points to greater uncertainty over global climate policy and a slowdown in ESG investing momentum, while citing the strength of the EU green bond market, supported by non-financial corporate issuance. On financial innovation, crypto-asset prices surged after the US election, with bitcoin up 30% and total crypto market capitalisation reaching EUR 3.3tn by end-2024, prompting ESMA to reiterate its warning about the highly speculative nature of crypto-assets. Market monitoring highlights include historically low corporate bond spreads, high hedge fund leverage, commercial real estate fund valuations that have not adjusted substantially to underlying prices, continued weak consumer confidence, equity-trading volumes up 23% year-on-year, and declining settlement failure rates since the 2022 implementation of the Central Securities Depositories Regulation.

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