ESAs joint report on EU financial system risks with policy recommendations

The European Supervisory Authorities (ESAs, comprising the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities Markets Authority) have published the Joint Committee's Autumn 2025 report, highlighting global risks to the EU financial system and recommending policy actions amid instability. The risks, attributed to ongoing geopolitical tensions including the U.S.'s imposition of widespread tariffs and continued conflicts in Ukraine and the Middle East, are said to have led to downward revisions in global and EU growth forecasts and divergence in monetary policy between the EU and U.S.

In light of these developments, the ESAs advise national competent authorities, financial institutions and market participants to:

• Continue integrating geopolitical risks into daily operations and risk assessments, ensuring continued access to market infrastructures from non-EU service providers to prevent disruption and maintain investor confidence.
• Plan for different scenarios amid global uncertainty, by using robust risk management, practices and forward-looking provisioning to address sudden short- and-medium-term challenges.
• Remain vigilant against cyber risks, particularly those arising from third-party IT dependencies—institutions should thoroughly implement the Digital Operational Resilience Act and leverage the use of technologies, such as AI to enhance cyber resilience.
• Monitor the growing links between cryptoassets and traditional finance, as new exposures and business lines emerge.
• Support the advancement of the EU's Savings and Investments Union and Banking Union to boost competitiveness and simplify regulation, while monitoring the expanding non-bank financial sector.

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