ESAs ask for geopolitical risk Integration and Solvency II review
The European Supervisory Authorities (ESAs) identify ongoing geopolitical tensions—particularly conflicts affecting energy markets—as key risks, potentially driving inflation, weaker growth, and financial market volatility. It states that high valuations and rising interest rates may increase liquidity and asset-quality risks. The update also highlights vulnerabilities in private finance due to limited transparency, complex interconnections, and shifting investor sentiment. Despite these concerns, it describes the EU financial sector as broadly resilient, with strong capital and liquidity positions. Authorities are said to urge continued vigilance, risk monitoring, and prudent management of exposures, especially regarding geopolitical developments and private markets.