The Joint Committee of the ESAs has published its second report on risks and vulnerabilities in the EU financial system. In its last report it identified four key cross-sectoral risks which it says still exist:
- the weak macro-economic outlook;
- the protracted low-interest rate environment;
- EU financial sector fragmentation; and
- reduced confidence in balance sheet valuations and risk disclosures.
The report notes reform measures recently agreed and which should address some of these risks. The ESAs also stressed the importance of working together to assess risks on a cross-sectoral basis. (Source: ESAs Report on Cross-Sectoral Risks)