ESMA sees prevailing market uncertainty as downside risks rise

Summary:

The European Securities and Markets Authority (ESMA) has published its second Trends, Risks and Vulnerabilities (TRV) Report for 2023. The report highlights that financial markets are adapting to the new economic environment, but risks remain high. Market sentiment improved in the first half of the year, but the economic outlook remains fragile, with uncertainties driving markets. ESMA's overall risk assessment remains at the highest level, citing high risks of corrections in equity and bond markets, as well as short-term risks for consumers due to inflation and volatility. The report also notes that the EU market for sustainable products continues to grow at a robust pace, and attention is being paid to the risk of greenwashing.