Wakeup call for Europe

In times of high uncertainty, the sustainability of financial markets is always a concern for everyone, due to the impact it can have on the real economy and the way civil societies can be directly affected.

In an increasingly global world determined by the proximity induced by technology and the democratization of information, and which is naturally found in the financial markets in a significant way, it is important to ensure the continued existence of balances of power that prevent, or mitigate, excessively dominant positions that could lead to extreme situations of authority that become irreversible and have undesirable consequences.

It is in a global context in which signs of threat to these balances are beginning to emerge that European agents need to reflect, in a broader sense, but particularly in the context of financial markets.

The last few months have been filled with extreme uncertainty regarding the profile and behavior of financial markets in the medium and short term.

We are living in perhaps one of the most unpredictable moments in recent history.

Europe, as an integral part of the global order, emerges in this scenario as a key player, both due to exogenous and endogenous factors. I believe that Europe should view this reality as the 'moment' to reclaim its role as a decision-making and active global agent, a role that has been lost to other blocs in recent decades.

The narrative of a linear rise of the euro as a global reserve currency, for example, deserves closer analysis. Although the US dollar maintains its dominant position (58% of global reserves), according to data released in June of this year by the European Central Bank (ECB) , the euro currently represents close to 20% of these reserves – a reflection of its stability and the crucial role it plays as a pillar in an increasingly multipolar and complex monetary system.

The signals we have been observing from European decision-makers reveal the perception that Europe, far from adopting a passive stance in this context, is promoting the redefinition of the rules of the game through a combined approach of regulatory innovation, banking resilience, and a pioneering commitment to sustainability. This is the new compass and the drivers guiding Europe's position in the global financial landscape.

Indeed, Europe has been taking a global lead in creating a framework that promotes stability, transparency, and innovation in financial markets. With the implementation of regulations such as MiCA (Markets in Crypto-Assets) and the AI Act between 2024 and 2025, Europe is not only regulating new assets and technologies but also creating a safe environment for their development. This proactive approach protects consumers and investors and fosters an innovation ecosystem that attracts talent and capital, positioning us at the forefront of the digital economy.

A robust regulatory framework, in turn, creates fertile ground for the resilience and growth of the European banking sector. In 2024, the region's leading banks recorded 14% revenue growth, a clear sign of vitality, according to data from GlobalData . This solidity, combined with a wave of strategic consolidation, is creating stronger, more efficient, and, consequently, more competitive institutions. While challenges such as the normalization of interest rates in 2025 require careful management, the unwavering focus on efficiency and digital transformation positions European banks on a successful trajectory.

But the true vanguard of this financial evolution finds its maximum and most impactful expression in the area of sustainability. Europe is no longer "just talking" about green finance—it is implementing it. For example, in 2024, the European Investment Bank (EIB) doubled its investment in Portugal , with a record amount of over €1.1 billion channeled to green finance. Approximately 63% of this funding is earmarked directly for climate action. This commitment, leveraged by ambitious programs like Horizon Europe and the growing integration of ESG criteria, is radically transforming our economy and creating a growth paradigm that is both prosperous and responsible.

This entire context will surely create a highly favorable environment for the development and robustness of European financial markets, elevating them to a higher global level from the perspective of investors. Let us Europeans learn not to fall into the trap of regulation that turns into 'bureaucracy,' and let us also 'deregulate' by regulating.

If this isn't ensured, we have no doubt that the market, broadly speaking, will try to find its own balance by adopting its own rules. Regulation is welcome, but considering the new information and technology paradigm that has already changed the shape of financial markets.

Europe's new role in financial markets is unequivocally that of a strategic pioneer. By adopting smart regulation, fostering a resilient banking sector, and leading the global transition to a green economy, Europe is adapting and building a new future. For financial institutions, this is a time of enormous opportunity and, more importantly, responsibility: actively participating in this transformation and leading the way is imperative for those who aspire to thrive in the new era of financial markets.

Managing Director & Head of Treasury at Bison Bank