Risk & Resilience

In its newly released Risks in BaFin’s Focus report, the Federal Financial Supervisory Authority cautioned that record-high valuations, geopolitical tension, and fast-moving financial innovation are combining in ways that could test financial stability in 2026. The watchdog pointed to a growing risk of abrupt market corrections, even as banks and insurers continue to report solid profits and strong capital positions.

A week after publishing my first reflections on the World Economic Forum’s Global Risks Report 2026, I find myself returning to the same unease that prompted that first piece—not because the report needs more explanation, but because the initial reaction to it already feels familiar.

In its Agenda 2026, the Dutch Authority for the Financial Markets signaled a tougher, more hands-on supervisory stance as technology reshapes financial markets and financial crime risks continue to evolve. The priorities include closer scrutiny of artificial intelligence, more intensive supervision of cyber resilience under EU rules, and a sharper, more targeted approach to investment fraud and money laundering.

The world is entering the second half of a turbulent decade with little sense of calm on the horizon. That is the underlying message of the orld Economic Forum's Global Risks Report 2026, which paints a picture of rising uncertainty, weakening cooperation, and intensifying competition across geopolitics, economics, technology, society, and the environment.

China’s market rally is starting to make regulators uneasy. As the country’s benchmark stock index hovers near a decade high, authorities have moved to signal that they are watching closely and are prepared to step in if speculative excesses continue, according to Reuters.

In a joint assessment published this week, Austria’s financial authorities say the regulation is beginning to reshape how digital risk is understood, reported, and managed across the financial system. The Financial Market Authority (FMA and the Oesterreichische Nationalbank (OeNB) described the first year of DORA as a constructive one, pointing to clearer insight into cyber incidents, tighter oversight of critical service providers, and what they call an emerging cultural shift in IT security across financial institutions.

‍The European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA) signed a new Memorandum of Understanding with the Bank of England, the Prudential Regulation Authority, and the Financial Conduct Authority, formalizing how they will work together to oversee critical ICT third-party service providers under the EU’s Digital Operational Resilience Act.