ESMA’s 1Q16 risk assessment remains unchanged from 4Q15. Systemic stress was at an elevated level, as uncertainty lingered around EU economic developments also reflecting the materialisation of key macro-financial risks at the global level. The low interest rate environment persisted in the EU, commodity prices remained at low levels and price volatility was high across assets with financial institutions in particular subject to significant price pressures at the beginning of 1Q16. Considerable fund return volatility was observed in the fund sector heightening concerns in relation to its increased interconnectedness with the rest of the financial system. In this environment, vulnerabilities linked to the mispricing of risks, deteriorating liquidity, potential amplification of market distortions persisted. These risks are deemed to prevail in the forthcoming quarter. Therefore our outlook for risk levels is stable for all risk categories.