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16 March 2022

ESMA warns consumers of risk of significant market corrections


ESMA today publishes the first Trends, Risks and Vulnerabilities (TRV) Report of 2022 and, in its outlook for 2022, continues to see high risks to institutional and retail investors of further, possibly significant, market corrections.


The pandemic’s resurgence at the end of 2021 and an uncertain economic and monetary policy

outlook are leading market participants to revisit their growth and market expectations. Going

forward, we continue to see high risks to investors of further – possibly significant – market

corrections as markets remain nervous and geopolitical tensions are rising.


Verena Ross, Chair, said:

“All investors should consider that the risk of market corrections remains acute. This

was demonstrated last year in two episodes of sell-offs largely driven by news first

related to Evergrande and then to the resurgence of Covid-19. The markets remain

highly volatile and ESMA sees growing uncertainty for investors going forward.”

“Retail investors are of particular concern to ESMA. Their participation in financial

markets has increased substantially in recent years, with new investors taking

advantage of the convenience and user-friendly features of mobile trading platforms.

This diversification offers opportunities but also comes with risks, and ESMA remains

concerned about risks to retail investors who buy assets with expectations of significant

price growth, and without realising the high risks involved....


 more at ESMA



© ESMA


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