The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) has published its report on risks and vulnerabilities in the European Union’s financial system.
EXECUTIVE SUMMARY AND POLICY ACTIONS
The COVID-19 pandemic continues to weigh heavily on the recovery prospects. While the roll-out of vaccines has started, continued COVID-19 infections, risks related to virus mutations, and concomitant containment measures are weighing on short-term recovery prospects. Uncertainty about the further trajectory of the pandemic remains extremely high. So far, swift and broad-based policy support measures across the EU have helped stabilise household incomes and mitigate adverse implications on the corporate sector. But these support measures are likely to become more targeted and will expire at some point—not least depending on the fiscal space of governments.