EBA sees risk of market corrections in case of uneven recovery

Second EBA Report on Trends, Risks and Vulnerabilities (TRV) in 2021

ESMA has published its second Trends, Risks and Vulnerabilities (TRV) report for 2021. In it, it highlights the continued rise in valuations across asset classes in an environment of economic recovery and low interest rates, increased investor risk appetite and the emergence of event risks such as GameStop, Archegos and Greensill. However, ESMA continues to see elevated risks and fragile fundamentals, with an outlook for continued high risks and uncertainties around corporate and sovereign debt sustainability and rising inflation expectations. 

In addition to its risk monitoring, ESMA provides four in-depth articles covering the financial stability risks of cloud outsourcing, credit rating agencies and green bonds.