TRV Risk Monitor: ESMA Report on Trends, Risks and Vulnerabilities No. 1, 2026 (European Securities and Markets Authority)

Summary

• European equity markets rose 22% in 2025, in line with global indices, and euro area banks recorded a + 20% increase in 2H25, resulting in a + 76% year-on-year rise.p.11
• Tether, by far the largest stablecoin, accounts for 59% of market size as of end-2025.p.15
• The 10 October crypto crash triggered liquidations of USD 19bn, equivalent to EUR 16.3bn, affecting a reported 1.6mn traders.p.17
• Private equity funds assets have doubled since 2020 in the euro area, up to EUR 721bn in 3Q25.p.22
• The portfolio share of US equity in euro area funds increased from 40% in 2022 to 46% in 3Q25.p.19
• ETFs attracted annual equity inflows of EUR 243bn in 4Q25, while active equity funds had net outflows of EUR 19bn.p.25
• Retail investors in leverage barrier products make average monthly returns of -1.1%, translating to total net losses of around EUR 700 mn annually.p.28

Key insights

1. High-yield corporate defaults fell sharply to 1.0% in 2H25 from 2.2% in 1H25, largely because the 1H25 surge was linked to one issuer.p.13
2. Euro-denominated stablecoins authorised under MiCA reached monthly trading volume of EUR 1bn in December 2025, around 0.3% of total stablecoin trading volume, up from 0.1% in June 2025.p.15
3. Bitcoin and Ether plunged over 12% and 15% within hours on 10 October.p.17
4. In the real estate fund sector, aggregate flows became slightly negative for the first time in 2025 (EUR -13.7bn).p.20
5. Leverage of alternative funds increased further, with the ratio of AuM/NAV at 154% compared with 122% at the end of 2022.p.21
6. Across several major social media platforms, 20% of messages on stocks referred to AI-related companies in 4Q25.p.26
7. US stocks account for almost 75% of social media messages on stocks and represent around 40% of EU retail transactions in equities.p.27
8. In a study of leverage barrier products, clients lost EUR 6,358 over the study period, with 74.2% of clients making a loss overall.p.28
9. Equity funds gained 0.8% per month on average in 2025 (10.1% annualised).p.19