At its 57th regular meeting on 27 March 2025, the General Board of the European Systemic Risk Board (ESRB) reviewed the European Commission’s priorities for the Savings and Investments Union and assessed that EU financial stability risks remain elevated amid political uncertainty and heightened geopolitical tensions. The Board urged the EU to act swiftly and take a firm policy stance, supported by robust regulation and rigorous supervision, to further strengthen the resilience of the EU financial system. Commissioner Maria Luís Albuquerque outlined the Commission’s Savings and Investments Union agenda, and the Board judged rapid delivery to be important for better integrated EU financial markets and more diversified funding channels. While noting market resilience and continued capital inflows, the Board warned that heavy trade restrictions or escalating geopolitical tensions could amplify macroeconomic, credit and market risks, raising corporate insolvencies and weakening household balance sheets. It also pointed to heightened volatility in US equities and crypto-assets and rising global sovereign yields, arguing that stretched valuations and possible underpricing of risk leave markets vulnerable to rapid adverse developments and a potential disorderly correction. The General Board highlighted increased EU and Member State security needs and advised that financing modalities for higher defence spending should be carefully considered, combining national and European tools to contain sovereign debt sustainability concerns, with a European safe asset identified as a potential significant support for funding EU defence and security initiatives. The meeting approved publication of two reports on the financial stability impact of broadening simple, transparent and standardised criteria to include on-balance-sheet securitisations and on the economic foundations for an opt-in 28th EU insolvency framework, and the ESRB released the 51st issue of its risk dashboard.
European Systemic Risk Board 2025-04-03
European Systemic Risk Board urges swift implementation of Savings and Investments Union priorities and a firm policy stance amid elevated stability risks
The European Systemic Risk Board (ESRB) reviewed the European Commission's Savings and Investments Union priorities, noting elevated EU financial stability risks due to political uncertainty and geopolitical tensions. The Board emphasized the need for swift EU action and robust regulation to enhance financial system resilience, while highlighting potential risks from trade restrictions. It also discussed financing for increased EU and Member State security needs, suggesting a European safe asset as potential support for defense funding.