The EU securities markets regulator updates its risk dashboard document. The colour in vogue this spring will not surprise you.
Red is for “very high risk”, in the colour-code language of the European Securities and Markets Authority, ESMA. In its brief risk update of 2 April – in the midst of global coronavirus spread – the red is applied to ESMA’s view on securities markets as well as infrastructures and services, and asset management. The consumer segment gets away with an orange code for “high risk”, without the “very”.
In terms of risk categories, liquidity and market risk score red, while risks of contagion, credit and operations stay at orange but with an outlook for worsening.
Behind the assessment lies a reality comprising stock indices that plunge, corporate bond-yield spreads near distress, sky-high equity volatility and fixed-income fund flight – all in colourful graphs.