In its latest risk report, “Risks in Focus 2026,” the German Federal Financial Supervisory Authority (BaFin) warns of a test for financial stability. At the same time, the authority stresses that there is “no reason for alarmism,” noting that most banks and insurance company remain profitable and well capitalized. On 18 February 2026, Rupert Schaefer, BaFin’s Executive Director for Strategy, Policy and Control, presented the report in a web seminar moderated by Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE.
Report includes three top consumer risks for the first time
BaFin sees particular risks for consumers in consumer credit financing, investments in crypto assets in connection with the influence of social media on investment behavior, and inappropriate costs of capital-forming life insurance policies. In particular, the authority warns about fraudulent financial offers and aims to raise awareness of the significant risks associated with crypto-asset investments. Heider welcomed the inclusion of consumer risks in the report, emphasizing that “consumer protection is essential for any form of finance.”
Geopolitics, digitalization, and sustainability remain key trends
BaFin identifies three important trends developing in the financial sector. The first is digitalization, where the authority distinguishes between technology and products.It sees considerable potential in areas such as blockchain technology, while warning that highly speculative crypto markets harbor a range of risks. One such risk could arise from the significant increase in value of stablecoins, for example due to the lack of international regulatory standards and the danger of a de-peg event, in which the price of such crypto tokens deviates from its target value.
Sustainability remains the second key trend. BaFin points in particular to increasing physical risks from extreme weather events and climate change, as well as ongoing transition risks related to the shift toward a low-carbon economy. The third major trend is geopolitical upheaval. These can affect almost all types of risk relevant to supervision, create tensions and, according to BaFin, lead to “massive losses of trust at all levels.”
BaFin identifies risk factors such as trade and military conflicts or the high levels of debt in major industrialized nations. It also remains unclear “whether the growth and price euphoria surrounding artificial intelligence will be justified by facts in the medium term.”
Six financial market risks under close scrutiny
Supervisors will pay particularly close attention to six financial market risks in 2026: a significant correction in international financial markets, corporate loan defaults, developments in commercial real estate markets, cyber incidents, the outsourcing of information and telecommunications technology services, and insufficient prevention of money laundering and terrorist financing. In the authority's view, all these factors make the seemingly positive price development fragile and lead to uncertainty on the financial markets.
Rewatch the web seminar on the BaFin risk report (in German)
