ESA report warns against risks for EU financial markets, Brexit, asset repricing and cyber-attacks key risks

On 12 April 2018, the Joint Committee of the European Supervisory Authorities (ESAs) published a report for the second half of 2017 which outlines the following risks as potential sources of instability: sudden repricing of risk premia as witnessed by the recent spike in volatility and associated market conditions; uncertainties around the terms of the UK’s withdrawal from the EU; and cyber-attacks. The report also reiterates the ESAs warning to retail investors investing in virtual currencies and raises awareness for risks related to climate change and the transition to a lower-carbon economy. Chapter 3 of the report discusses risks related to the UK’s decision to leave the EU. Key points include: the impact of the UK’s withdrawal observed to date varies across the financial sector. Concerning securities markets, the structural impact of the UK’s decision to withdrawal appears to be limited. In terms of registrations, clear-cut trends are not yet…

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