The Dutch Authority for the Financial Markets has published its annual Financial Stability Report, concluding that the escalation of the conflict in the Middle East has worsened the global economic outlook and increased risks to financial stability. Higher inflation expectations, weaker growth and greater geopolitical uncertainty are raising market volatility and making valuation, liquidity and operational risks more acute for financial firms, while also increasing the risk of cyberattacks and disruption to critical infrastructure. The report highlights four main pressure points. The Dutch TTF gas derivatives market remains functional despite sharp price increases and higher volatility, but supervision will stay focused on transparency, concentration risk and the resilience of trading platforms. The AFM also points to growing dependence on critical, often non-European, digital infrastructure, rising cyber and AI-enabled fraud risks, and possible market integrity concerns where AI leads to faster and more uniform market reactions. In the Netherlands, annual losses from investment fraud are estimated at about EUR 750 million. On private credit, the report says illiquidity, valuation issues and limited transparency could amplify stress, especially through fund outflows and forced sales, and it expects asset managers to strengthen liquidity risk management and product providers to assess investor suitability carefully given product complexity and limited tradability.

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