European agencies warn of the risks of digital dependence and private credit for the EU financial system
Quick Look
The European supervisory authorities Eba, Eiopa and Esma report that the financial sector's dependence on non-European digital infrastructures, such as cloud and artificial intelligence models, amplifies geopolitical and operational risks, together with the growth of non-transparent private credit, calling for strengthening monitoring despite the resilience demonstrated by the system.
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Why It Matters
The three European supervisory agencies (EBA, EIOPA and ESMA) have published their periodic risk assessment for autumn 2026, highlighting vulnerabilities in the EU financial system linked to dependence on non-EU technology suppliers and the growth of private credit.
The European financial sector's dependence on non-European infrastructure and digital service providers, such as cloud, data centers and artificial intelligence models, "risks amplifying the impact of geopolitical shocks and operational disruptions" and represents "a particular concern, together with the growth of cybersecurity risks" and private credit.
The alarm comes from the three European supervisory agencies (ESA) Eba, Eiopa and Esma which, in the periodic risk assessment of autumn 2026, believe that the reliance on ICT service providers outside the European economic area represents a critical issue that is already present, but which is "now aggravated by the geopolitical framework".
Added to digital dependencies are the IT risks linked to artificial intelligence: increasingly powerful AI models amplify the attack surface and cyber threats for banks, insurance companies and funds. The second node is private credit, a sector that is still relatively small in the EU but is growing rapidly. According to the ESA, the limited transparency and increasingly close links with the rest of the financial system could transform it into a point of fragility in periods of market stress.
The three authorities therefore invite supervisors and market participants to strengthen preparedness and closely monitor these three sources of risk. Despite the critical issues, the general picture remains solid: the EU financial system "has demonstrated resilience", with strong foundations for investment funds, insurers and banks.
Open Questions
- What specific countermeasures do the agencies propose to reduce dependence on non-European digital infrastructures?
- How do they plan to address the lack of transparency in the private credit sector?
- What is the timetable for any regulatory action on these risks?
