The European Securities and Markets Authority (ESMA), one of the region’s main regulatory bodies, raised its market risk indicator to its highest possible level on Monday .
“Overall, market risks for the European securities markets have increased,” ESMA said in a new report that raised its market risk warning to “very high”.
“This increase is due to high volatilities and fluctuating performances across asset classes – all of which translates into elevated risks for investors, market infrastructures and the financial system at large.”
It added that the key risk sources were: “the improved but uneven economic outlook, ultra-low interest rates, the debt crisis in the euro area, funding patterns, and potential weaknesses in market functioning.”
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