Germany’s financial regulator, BaFin, has cautioned about potential market corrections amidst high valuations and ongoing global uncertainty BaFin President Mark Branson, in comments to the “Handelsblatt” newspaper, indicated that a downturn similar to the one experienced in April is still possible
Branson suggested that many investors appear to be delaying acknowledgement of geopolitical risks, clinging to optimistic scenarios until concrete evidence proves them wrong Should this sentiment shift, he warned, it could trigger a renewed period of market volatility across both equity and bond markets
While short-term fluctuations are typical and not a primary concern for financial supervisors, Branson emphasized the potential for a sudden change in investor sentiment to destabilize financial markets He pointed to the dynamic witnessed in April – a rapid decline subsequently tempered by moderating statements regarding trade disputes – as an example of how quickly situations can evolve The regulator is actively monitoring these risks and their potential impact on market stability