European Regulators Advise Financial Institutions to Strengthen Cyber Resilience

The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) has issued their first joint risk assessment report for 2022. The report highlights the increasing vulnerabilities across the financial sector as well as the rise of environmental and cyber risks.  

In light of the risks and uncertainties, the ESAs advise national competent authorities, financial institutions and market participants to take the following policy actions:

• ​Financial institutions should be prepared for further potential negative implications stemming from geopolitical tensions and ensure compliance with the sanctions regimes put in place both at the EU and at global levels;

• ​Financial institutions and supervisors should prepare for a possible deterioration of asset quality in the financial sector;

• ​The impact of further increases in yields and sudden reversals in risk premia on financial institutions and investors should be closely monitored;

• ​Retail investors are of particular concern, and supervisors should monitor risks to retail investors seeing that their participation in financial markets has increased substantially in recent years;

• ​Financial institutions should further incorporate ESG considerations into their business strategies and governance structures; and

• Considering the elevated level and frequency of cyber incidents, financial institutions should strengthen their cyber resilience and prepare for a potential increase in cyberattacks.