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Heightened geopolitical and economic uncertainty has hurt retail investor confidence, European securities regulators say.

In a new report, the European Securities and Markets Authority (ESMA) said that retail investor sentiment fell to a five-year low in the third quarter of 2019 before recovering a bit toward the end of the year.

Retail investors remained cautious, it said, which has them largely putting their savings into bank deposits.

“As market risks increasingly deter retail investors, capital market participation – an important long-term objective – is weakened,” the report said.

Additionally, the ESMA said that market, credit and liquidity risk all remained high.

“Credit risk, in particular, remains elevated with deteriorating corporate debt quality and increasing risks of fallen angels (bonds being downgraded to below BBB),” it said.

Looking ahead, the ESMA said that it sees “a weaker economic outlook and continuing uncertainty over the potential impact of the coronavirus, global trade negotiations and Brexit.”

It also said that its risk outlook is stable.