Three of Europe’s financial regulators have warned EU governments regarding the reliance of the bloc’s banks, funds and insurers on foreign providers and infrastructure.In a joint risk, the regulatory bodies warned that this reliance could magnify the effect from any geopolitical shock or cyberattack.Why are financial regulators warning EU governments?The Joint Committee of the European Supervisory Authorities, which includes the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority, handed its autumn findings to the Financial Stability Table of the EU’s Economic and Financial Committee on 10 September 2026 before the details were made public today.The main concern is that EU finance is too closely linked to non-EU systems at almost every layer.For example, Equity UCITS funds and alternative investment funds carry large U.S. exposures. Banks also depend on information and communications technology suppliers and payment systems based outside the European Economic Area, and run funding gaps in currencies they do not issue, mostly dollars, sterling and Swiss francs. Clearing, repo and credit ratings are also largely routed through non-EU firms.The authorities pointed out that relying on non-EU counterparties allows EU firms to be affected by foreign regulatory regimes and political events they cannot control.Adding to that, the regulators said frontier AI models can find and exploit software weaknesses very quickly and easily, which raises the potential damage of AI-assisted attacks.Europe’s cybersecurity agency ENISA reached a similar conclusion regarding frontier AI models in its own 2026 threat report. The report lists more than 48,000 new vulnerabilities logged in 2025, a 22% jump, and also points out that threat groups are increasingly using AI in their operations.Has quantum computing become a real threat to crypto traders?Quantum computing is one of the areas flagged by the ESAs. The concern is that a sufficiently powerful quantum machine could one day be able to derive a private key from an exposed public key, leading to unauthorized transactions.Thankfully, no such computer exists yet, but Google Quantum AI researchers estimated in March that creating a computer that can break the cryptography behind many cryptocurrencies might take roughly 20 times fewer physical qubits than once thought.Developers are already working on defenses. In February, Bitcoin’s Jameson Lopp, alongside five other collaborators, proposed a plan that would retire the network’s current signature scheme.The Ethereum Foundation is aiming to strengthen Ethereum against quantum attacks by December 2029.Private credit is the third area of concern. The ESAs found that the EU market for it is still small, with banks in the EU and EEA holding related exposures worth just 0.6% of their total assets. But the regulators still flagged it as one to watch closely due to the fact that the market is growing fast and isn’t very transparent.Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.