ESAs publish financial system risks report: The Joint Committee of the ESAs has published its fifth "Report on Risks and Vulnerabilities in the EU Financial System". Overall, the report found that while the nature of the risks facing the EU financial system have not changed, they have intensified. The risks identified fall into two broad categories: macro risks and operational risks. The two key operational risks identified were:

  • business conduct risk, the costs of which the report recommends should be included in future stress tests where appropriate, while institutions should also strengthen product oversight and governance frameworks; and
  • continuing concerns about IT operational risk and cyber risk and the challenges these pose to the safety and integrity of financial institutions.

The report also notes that, despite the risks, a range of different policy and regulatory initiatives are contributing to improved stability and confidence in the financial system as well as helping funding channels in the real economy.(Source: ESAs - Main Risks to EU Financial Market Stability Have Intensified)