European financial regulators have warned that external dependencies and emerging technologies could test the resilience of Europe’s financial system.
The latest assessment focuses on foreign infrastructure, cybersecurity, artificial intelligence, quantum computing and private credit. Regulators said these risks could amplify shocks even though Europe’s financial system remains stable.
They urged banks, funds and insurers to strengthen preparations for disruptions linked to technology and geopolitics.
Non-EU dependencies expose finance to external shocks
The European Supervisory Authorities presented their autumn risk findings to the EU Financial Stability Table on September 10. The Joint Committee includes the EBA, EIOPA and ESMA, which published the findings on September 23.
The regulators said EU finance relies heavily on non-EU providers, markets and currencies across several important functions. Equity UCITS funds and alternative investment funds carry large exposure to U.S. markets. Banks also depend on ICT providers and payment systems located outside the European Economic Area.
Funding gaps in foreign currencies add another layer of risk, particularly in dollars, sterling and Swiss francs. The ESAs also highlighted external dependence in clearing, repo markets and credit ratings. Much of that activity runs through non-EU firms.
According to the regulators, these links expose EU institutions to foreign rules and political events beyond their control. They warned that geopolitical shocks or operational failures could spread faster through concentrated external relationships.
AI, quantum and private credit widen risk outlook
The ESAs also identified advanced AI as a growing cybersecurity concern. Powerful models can help attackers identify and exploit software weaknesses faster, increasing the potential impact of coordinated attacks.
ENISA reported similar risks in its 2026 threat assessment. The agency recorded more than 48,000 new vulnerabilities in 2025, up 22% from the previous year. It also found that malicious groups increasingly use AI to support cyber operations.
Quantum computing creates a different long-term challenge. A sufficiently powerful quantum computer could eventually derive private keys from exposed public keys and compromise blockchain transactions. However, current machines cannot break the cryptography protecting major blockchain networks today.
Ethereum cited March 2026 Google research estimating about 20-fold fewer resources than earlier estimates for elliptic-curve attacks. The shift has increased pressure on developers to prepare before quantum systems reach the required scale.
Bitcoin developers are already discussing migration plans. Jameson Lopp and five collaborators submitted BIP-361 in February, proposing a future phaseout of vulnerable ECDSA and Schnorr signatures.
Ethereum has also accelerated post-quantum planning. The Ethereum Foundation’s protocol team aims to make Ethereum’s execution, consensus and data layers quantum-resistant by December 2029.
Private credit forms the third major concern. EU and EEA banks hold related exposures equal to about 0.6% of total assets. The ESAs said the market remains relatively small but is expanding quickly and lacks transparency.
Regulators warned that valuation uncertainty, leverage, liquidity mismatches and financial-system links could increase stress during market disruptions. They urged institutions to monitor those exposures while improving crisis preparedness and technology risk management.
