According to the organisation, experts from the European Central Bank (ECB) and Yahoo! will be collaborating with researchers from universities based in Italy and Switzerland on the project.
The group is to analyse the global system of banking transactions and internet search queries to develop a picture of where risk builds up within financial systems.
It is hoped that the analysis will allow regulators to implement an 'early-warning' system to make them aware of any future volatility.
Neelie Kroes, commission vice-president for the Digital Agenda, said "This new research aims to allow better monitoring of financial markets by focussing on systemic risks arising from the highly inter-connected digital information and transaction systems in the financial markets."
The EC added that the global credit crisis occurred as risk monitoring systems did not show how interconnected many financial institutions were - this in turn created a 'domino effect' which resulted in the period of instability.
Policy makers such as the ECB, the European Systemic Risk Board, or the Basel Committee on Banking Supervision are hoping that the Forecasting Financial Crises project will enable them to anticipate problems within markets in the future.
By Jim Ottewill