The European Securities and Markets Authority’s (ESMA) overall risk assessment remains at high levels, according to ESMA’s Risk Dashboard published on Wednesday.
In the first quarter, European equity markets suffered significant price corrections, and saw a rise in volatility.
Market risks remain “very high,” with over-valuation in equities, and heightened market uncertainty, “as the period of ultra-low interest rates draws to a close,” the report states.
ESMA’s outlook for liquidity, contagion and credit risk also remains high. Operational risk continues to be elevated “with a deteriorating outlook, as Brexit-related risks to business operations and vulnerabilities to cyber-attacks rise,” the report states.
Risks faced by consumers due to complex products — including initial coin offerings (ICOs), virtual currencies, binary options, and contracts for difference (CFDs) — have become a “key concern” for ESMA.