Financial Regulator Warns of Market Turbulence Amid Geopolitical Tensions
The European Securities and Markets Authority (Esma) has cautioned against further market volatility in the face of escalating geopolitical tensions. Esma’s chief, Verena Ross, told the Handelsblatt that the risk of setbacks is significant, given the uncertain global environment. “Mark participants must continue to expect large fluctuations in the markets and factor this into their risk management” she emphasized.
Following the US tariffs announced by President Donald Trump in April, many investors sold off US assets and dollar-denominated investments. However, Ross remains convinced that the US capital market will continue to hold significant relevance for Europe. “Europe’s financial infrastructure is heavily reliant on US institutions, such as payment systems and rating agencies” she noted. “Furthermore, many European savers and investors have substantial holdings in the US.”
Despite the uncertainty, the German Dax index and the Bitcoin have reached new highs in 2025. While the cryptocurrency market is still relatively small in Europe, it is growing, according to Ross. “We are observing a trend where more and more banks are offering their customers the ability to trade and store cryptocurrencies” she said. The largest banks in the Eurozone have stored cryptocurrencies worth €4.7 billion for their customers in 2024, a significant increase from €400 million in 2023, Ross added.