ESMA flags market vulnerabilities masked by investor optimism
ESMA published its second Trends, Risks and Vulnerabilities (TRV) report of 2026, finding EU financial markets resilient but with stretched technology valuations and heightened geopolitical tensions. The regulator warns of a disconnect between deteriorating macro-financial conditions and upbeat market valuations, increasing the risk of sudden corrections. It also highlights risks in private credit, crypto-asset interconnectedness, cyber risks from frontier AI, and retail investor behaviour on digital platforms.
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