The EU remains vulnerable to future shocks, leavinggovernments and other debt issuers open to negative credit implications,according to Moody's.

Although the EU introduced several measures to fortify institutionsin the region, institutional reform and eurozone integration remain unfinished,leaving the region exposed to shocks and downside credit risks, the agencysaid.

Additionally, the institutions in the region are alsoexposed to challenges from outside the financial sector, including weaknessesin the EU's decision-making process. The U.K.'s exit from the EU could alsoresult in increased support for anti-EU parties at other member countries,dampen investor confidence and cause liquidity problems for issuers in theregion, Moody's noted.