The European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority published their Autumn 2025 Joint Committee Report on risks and vulnerabilities in the EU financial system, warning that rising geopolitical uncertainty linked to global trade and security tensions is worsening the risk outlook. The authorities call for increased vigilance and urge financial entities to maintain adequate provisions in a more unpredictable environment. The report notes that sudden structural shifts in global trade and security have contributed to a deterioration in the economic outlook in the first half of 2025 and that, despite the initial moderate impact of the US–EU preliminary trade agreement, financial stability risks and the likelihood of further corrections remain. While banks’ profitability, insurers’ solvency positions, pension fund funding levels, and the resilience of market infrastructures and money market funds are described as solid, the ESAs highlight new transmission channels from tariffs and currency moves into commodities and foreign exchange markets and greater sensitivity via interlinkages with US financial markets. They advise supervisors and market participants to embed geopolitical risks in day-to-day operations and risk assessments, stress test liquidity and prepare for potential market corrections, strengthen vigilance against cyber risks including third-party dependencies, monitor crypto-asset contagion risks, and support the Savings and Investments Union initiative while considering the liquidity and risk profile of alternative investments and their suitability for retail investors.
European Insurance and Occupational Pensions Authority 2025-09-19
European Insurance and Occupational Pensions Authority and other European Supervisory Authorities publish Autumn 2025 Joint Committee risk report calling for vigilance and adequate provisions
The European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority released their Autumn 2025 Joint Committee Report, highlighting increased risks in the EU financial system due to geopolitical uncertainty. The report advises financial entities to enhance vigilance, maintain adequate provisions, and incorporate geopolitical risks into operations. It emphasizes stress testing liquidity, monitoring crypto-asset contagion risks, and supporting the Savings and Investments Union initiative.