Remarkable resilience of financial markets in a higher-for-longer interest-rate environment

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Summary:

The European Securities and Markets Authority (ESMA) has published its first risk monitoring report of 2024, highlighting key risk drivers affecting financial markets. The report notes that the financial system has shown resilience, but markets remain sensitive to geopolitical and macro-financial uncertainty, which may lead to market corrections.

Risk drivers include the risk of false or misleading information on social media, increased interest rates, and greenwashing. The report also highlights structural developments in market-based finance, sustainable finance, and financial innovation, as well as market monitoring updates on securities markets, asset management, consumers, and infrastructures and services.