European supervisors flag rising liquidity risks

Esma's Paris headquarters

European supervisors warn of rising market liquidity risks in a report published on September 9, raising the prospect of a market reversal being triggered by a "relatively limited" move.

A combination of changing technology, regulation and competition are contributing to a "bifurcation" of liquidity in Europe, say the European Banking Authority, European Securities and Markets Authority, and European Insurance and Occupational Pensions Authority.

On the one hand, increased competition in trading

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