Safeguarding and promoting financial stability amid economic uncertainties

P10_TA(2026)0004

Safeguarding and promoting financial stability amid economic uncertainties

Committee on Economic and Monetary Affairs

PE771.960

European Parliament resolution of 20 January 2026 on safeguarding and promoting financial stability amid economic uncertainties (2025/2051(INI))

The European Parliament,

– having regard to the Commission report of 24 January 2024 on the macroprudential review for credit institutions, the systemic risks relating to Non-Bank Financial Intermediaries (NBFIs) and their interconnectedness with credit institutions, under Article 513 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (COM(2024)0021),

– having regard to the European Central Bank (ECB) Financial Stability Review of November 2024,

– having regard to the ECB Financial Stability Review of May 2025,

– having regard to the Quarterly Review of the Bank for International Settlements (BIS) of March 2025 on international banking and financial market developments,

– having regard to the letter from the Chair of the Financial Stability Board (FSB) to G20 Finance Ministers and Central Bank Governors of 21 February 2025,

– having regard to the FSB status report of 22 October 2024 entitled ‘G20 Crypto-asset Policy Implementation Roadmap’,

– having regard to the FSB report of October 2021 entitled ‘Policy proposals to enhance money market fund resilience: Final report’,

– having regard to the response of the European Systemic Risk Board (ESRB) of November 2024 to the Commission’s consultation assessing the adequacy of macroprudential policies for non-bank financial intermediation, entitled ‘A system-wide approach to macroprudential policy’,

– having regard to the ESRB’s compliance report of February 2025 on the ESRB recommendation of 2 December 2021 on reform of money market funds (ESRB/2021/9),

– having regard to the update of the Joint Committee of European Supervisory Authorities of 31 March 2025 on risks and vulnerabilities in the EU financial system – spring 2025,

– having regard to the opinion of the European Securities and Markets Authority (ESMA) of 14 February 2022 on the review of the Money Market Fund Regulation,

– having regard to the Global Financial Stability Report of the International Monetary Fund (IMF) of 22 April 2025,

– having regard to the report by Mario Draghi of 9 September 2024 entitled ‘The future of European competitiveness’ (Draghi report),

– having regard to the report by Enrico Letta of 17 April 2024 entitled ‘Much more than a market’ (Letta report),

– having regard to its resolution of 6 July 2011 on the financial, economic and social crisis: recommendations concerning the measures and initiatives to be taken1,

– having regard to the report of its Committee on Economic and Monetary Affairs of 26 March 2025 on Banking Union – annual report 2024,

– having regard to the hearing by its Committee on Economic and Monetary Affairs of 19 March 2025 on assessing the adequacy of the macroprudential framework for non-bank financial institutions in the EU,

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Economic and Monetary Affairs (A10-0232/2025),

A. whereas financial stability remains a cornerstone of economic resilience and growth, requiring vigilance in the face of significant economic uncertainty, external shocks and systemic risks;

B. whereas the global financial crisis has demonstrated the risks to advanced economies of financial instabilities that assume global proportions;

C. whereas Russia’s continued aggression against Ukraine and the economic consequences thereof have led to inflationary pressures, volatility in energy markets and financial uncertainty;

D. whereas the imposition of tariffs contributes to the fragmentation of global trade, exacerbating supply chain disruptions and posing additional risks to financial markets and the broader economy;

E. whereas a well-integrated capital markets union (CMU) is essential for absorbing shocks and fostering investment within the EU and further integrating the single market;

F. whereas the stability of NBFIs will be even more important if the European Union shifts more of its financing to capital markets;

G. whereas NBFIs operate across very diverse sectors;

H. whereas lagging economic growth, aggravated by trade tensions, has adverse effects on leveraged entities and will increase credit risk for financial institutions;

I. whereas high asset valuations in equity and corporate debt markets raise concerns about the possibility of a market correction with systemic consequences;

J. whereas the residential real estate sector, which has benefited from the low-interest rate environment, plays a pivotal role in financial stability on account of its central place in the economy, the significant share of household wealth concentrated in property assets, the key involvement of the financial sector in funding real estate investments, and the crucial function of real estate as collateral in credit markets;

K. whereas complexity and interconnection among financial sectors has gained importance, with NBFIs being net lenders to banks and the wider economy;

L. whereas the footprint of NBFIs in strategic financial markets, such as sovereign bond markets, has grown, as demonstrated by the unwinding of cash-futures basis trades by hedge funds in the US treasury market during the tariff crisis of April 2025;

M. whereas targeted reforms could enhance the resilience of EU money market funds in line with international standards;

N. whereas the financial sector remains vulnerable to cyber threats, hybrid warfare tactics and hidden leverage that could destabilise critical financial infrastructure;

Banking Union and CMU: shock absorption and resilience

1. Welcomes the renewed debate on the need to boost EU productivity and competitiveness, inter alia through better integrated capital markets and a resource-efficient economy, as outlined in the Draghi and Letta reports;

2. Calls on the Commission to prioritise a CMU agenda that supports EU competitiveness while not hampering financial stability;

3. Emphasises the CMU’s goal to mobilise private capital more effectively to close the EU’s investment gap and the role it can play as a shock absorber; stresses that the CMU agenda should also contribute to correcting structural imbalances in the EU’s financial system; regrets the persistence of a tax-induced debt-equity bias;

4. Recognises that the completion of the Banking Union must be a strategic priority in the deepening of the Economic and Monetary Union;

5. Notes the challenges stemming from more integrated financial markets in the absence of more coherent supervision, including the trade-off between efficient risk sharing and diversification, on the one hand, and contagion, spillover and amplification risks, on the other;

6. Recognises the trade-off with regard to cross-border banking consolidation between geographic diversification, cross-border financial services, economies of scale, and a potential weakening of the bank-sovereign nexus, on the one hand, and the ‘too big to fail’ problem, the potential weakening of smaller financial centres and links to small and medium-sized enterprises (SMEs) and local economies on the other;

7. Notes that systemic risk may also arise from smaller institutions, as they may exhibit highly correlated balance sheets;

8. Stresses the importance of access to capital, especially for SMEs, such as venture capital going to growth companies, while preserving financial stability, ensuring that growth and resilience go hand in hand;

Macro-financial risks and geopolitical fragility

9. Highlights the ECB’s primary objective of maintaining price stability and the key role of the ESRB, European supervisory authorities and central banks in contributing to financial stability in the Union;

10. Recalls that the Eurosystem has been built on the principle of monetary dominance; calls for the preservation of the ECB’s independence as a factor supporting financial stability;

11. Underlines that certain central bank market interventions come with the risk of market distortions that might affect financial stability;

12. Notes the Union’s exposure to external shocks via strong interlinkages with foreign financial markets and entities, reliance of the EU financial sector on non-EU service providers and pressures from rising trade tensions amid geopolitical uncertainty;

13. Emphasises the risks of high sovereign debt and deficits; recalls that market concerns about sovereign debt sustainability, the inadequate banking regulatory framework at the time, and contagion through interconnected financial systems drove the 2008 financial crisis and the subsequent euro area crisis;

14. Warns of spillover effects to the financial sector; takes note in this regard of calls to mitigate systemic vulnerabilities; stresses, however, that any future developments should not undermine national fiscal responsibilities;

15. Calls on the Commission to enforce compliance with the EU’s economic governance framework and convergence with fiscal rules of the Stability and Growth Pact to ensure sound and sustainable public finances;

16. Recognises that structural reforms to strengthen the euro area’s financial and institutional architecture and reduction of market fragmentation could elevate the international role of the euro and potentially bolster financial and monetary stability; notes the ongoing discussions on the digital euro;

17. Highlights the potential instability stemming from highly leveraged financial institutions, while acknowledging they can play economic roles such as hedging, improving market liquidity, price discovery or risk sharing;

18. Stresses the importance of coordination among macroprudential supervisors through systemic risk analysis and oversight and alignment with microprudential supervision to ensure compatibility;

19. Acknowledges the potential risks to financial stability arising from more frequent manifestations of physical risks of climate and nature hazards and climate-related transition risks;

Banking sector stress and NBFI oversight

20. Emphasises the need to ensure the implementation of the Basel III framework to enhance the resilience and global competitiveness of EU banks; notes the continued lack of clarity concerning implementation of the Basel III standards in some major non-EU-country jurisdictions and the need for the Union’s banking system to remain competitive in an international context; emphasises the importance of maintaining the integrity of the Basel framework, underlining that financial stability itself can be seen as a competitive advantage;

21. Highlights the importance of keeping a sound macroprudential framework while ensuring simplification, legal clarification and burden reduction, particularly for smaller entities; highlights that there is room for simplification and harmonisation in the design and application of macroprudential buffers; calls on the Commission and supervisory authorities to systematically apply the principles of proportionality, cost-efficiency and digital simplification where possible and without jeopardising financial stability;

22. Stresses that simplification of the post-2008 financial crisis reforms should be considered if there are clear and substantiated benefits to the real economy and if there are no risks to financial stability; takes note of the debate on the securitisation package;

23. Takes note of the ECB analysis on persistent vulnerabilities in commercial real estate markets, compounded by rising interest rates and NBFI exposures, which deserve close monitoring; calls, in this context, for the ESRB to closely monitor the role of NBFIs active in real estate markets and issue relevant recommendations; recognises, in addition, the high levels of household indebtedness;

24. Urges the ECB to assess financial institutions’ exposure to geopolitical risks, including indirect effects of sanctions, tariffs and economic fragmentation as part of the regular Supervisory Review and Evaluation Process in the context of strategic autonomy;

25. Acknowledges the growing systemic relevance of NBFIs, which comprise over 40 % of the EU financial sector’s assets; considers that such entities may contribute to financial stability risks when insufficiently regulated;

26. Notes the diversity of NBFIs’ business models and their important financing role; highlights that for many sectors, there is already European sectoral regulation in place, such as for hedge funds (Alternative Investment Fund Managers Directive2), money market funds (Money Market Funds Regulation3), insurance undertakings (Solvency II), investment firms (Investment Firms Directive4 and Regulation5) or pension funds (Directive on institutions for occupational retirement provision6); notes that the current framework, however, focuses primarily on investor protection and market integrity rather than on reducing systemic risks7; calls for a thorough review of regulatory gaps regarding NBFIs, including in less regulated areas such as family offices and supply chain finance companies;

27. Takes note of the Commission’s 2023 report on the functioning of money market funds and recent amendments to the Money Market Funds framework; calls on the Commission to come forward with a reform of the Money Market Funds Regulation8 in line with international standards, regulatory progress made in other jurisdictions and the recommendations of the ESRB and ESMA;

Liquidity, margining and digital risks

28. Highlights the fact that procyclical margin calls during crises such as COVID-19 and the 2022 energy turmoil drove significant liquidity stress; notes the importance of liquidity preparedness, and generally of leverage and capital buffers in this regard;

29. Calls for tools to better capture the scale and speed of liquidity outflows resulting from margin calls during systemic events, especially for energy utilities and NBFIs;

30. Stresses the need for resilient clearing infrastructure, robust collateral frameworks and coordinated supervision of central counterparties (CCPs); notes the Commission’s decision to extend the equivalence regime for UK-based CCPs and notes continuing concerns regarding European dependence on non-EU CCPs;

31. Supports greater transparency and macroprudential oversight in margining practices, including stress testing and scenario analysis, drawing on the FSB's recent work on liquidity preparedness for margin and collateral calls;

32. Expresses its concern regarding growing interlinkages between crypto-asset and decentralised finance markets and the traditional financial system; supports the FSB, the standard-setting bodies and the ESRB in their efforts to install a regulatory framework and harmonise its classification;

33. Takes note of the FSB’s analysis that for the time being, financial stability risks arising from crypto-asset markets appear limited9; flags, however, the potentially systemic relevance of developments in the markets for crypto-assets; notes the largely speculative nature of crypto-assets and their important role in illicit transactions; urges the Commission and the ESRB to closely follow evolutions in this field;

34. Welcomes the fact that the European Union has put in place a prudential framework for crypto-assets (MiCAR); stresses the importance of timely and consistent implementation and calls on the Commission to monitor remaining regulatory gaps;

35. Highlights the fast growth of the stablecoin market, which remains so far largely restricted to the crypto ecosystem; notes that the regulatory landscape with regard to stablecoins in major non-EU-country jurisdictions is rapidly changing; urges the Commission to assess whether there are potential channels of contagion, such as in the case of multi-issuance;

36. Highlights that the Union has adopted measures to strengthen the digital resilience of financial entities, most notably through the Digital Operational Resilience Act10; encourages innovation in the field of digital finance and extensive investment in cyber-resilience to protect financial infrastructure against external threats; calls on the Commission and the ECB to map and address dependencies of the European financial system on non-EU digital service providers, single points of failure and the risk of hybrid attacks;

37. Underlines that improvements in financial literacy can contribute to individual resilience, more stable financial markets, and increased participation in the CMU;

38. Notes that maintaining reasonable and reliable logistics and infrastructure for cash availability remains an essential element of financial stability and public trust;

Enhancing supervisory coherence, data capabilities and crisis preparedness

39. Supports a holistic, more coherent system-wide and activity-based supervisory approach identifying and addressing risks and vulnerabilities associated with different types of activity across the financial sector, such as lending, transactions and asset management;

40. Emphasises the importance of a robust and credible crisis management framework; highlights the role of the Single Resolution Mechanism in ensuring the effective resolution of failing institutions and supports the ECB’s function as lender of last resort to safeguard liquidity and trust during crises; notes that a backstop for the Single Resolution Fund is still missing;

41. Supports the ECB, the ESRB, the European and national supervisory authorities and the Authority for Anti-Money Laundering and Countering the Financing of Terrorism in safeguarding EU financial stability and addressing emerging global financial risks, including coherent supervision by ESMA for systemic cross-border NBFIs;

42. Warns against regulatory arbitrage and underlines the need to address hidden leverage vulnerabilities revealed in past disruptions;

43. Calls on the Commission to uphold a high level of ambition in implementing the FSB recommendations on leverage in the EU;

44. Underscores that authorities, both at national and EU level, should have qualitative, easily accessible data and have adequate resources to analyse the data;

45. Calls for enhanced transparency, data analytics capabilities and streamlined data-sharing mechanisms between national and EU authorities, with respect of data protection safeguards, in order to support a more comprehensive risk monitoring framework and system-wide stress-testing capabilities, including on cyber-resilience, energy outages and the collateral framework; notes that some national authorities have already communicated their intention to carry out stress tests on interconnections between the banking sector and the NBFI sector;

46. Calls for strengthened cooperation with international financial institutions, including the IMF, the Basel Committee on Banking Supervision, the BIS and the FSB, to tackle cross-border stability risks;

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47. Instructs its President to forward this resolution to the Council and the Commission.