BaFin published the supervisory priorities for 2019. In 2019, the ongoing digitization and the exit of the United Kingdom from EU will be the focus areas of the oversight activities of BaFin. BaFin has identified several areas of action for both issues.
The supervisory priorities related to the digitization will involve addressing the digitization-related market changes through supervision and regulation; ensuring that the innovative technologies, IT systems, and data used by the supervised entities are safe; and transforming itself—internally and as an interface to the market—in the face of advancing digitization. Additionally, as Brexit affects all of the business areas of BaFin, dealing with the consequences of Brexit represents a supervisory focus for 2019 via the following key actions:
- Dealing with the consequences of the removal of the EU passport for new and existing business
- Arrangements to continue cooperation with the UK supervisory authorities in supervisory and regulatory areas of responsibility
- Maintaining and intensifying the (public) communication on Brexit
The supervisory priorities for banking include performing the less significant institution (LSI) Stress Test 2019 to review the impact on earnings and interest rate risk. The 2019 priorities for the activities related to securities markets include reviewing implementation of Markets in Financial Instruments Directive and regulation (MiFID II/MiFIR) and Packaged Retail and Insurance-Based Investment Products (PRIIPs) Regulation as well as preparing for the implementation of EU Prospectus Regulation. Additionally, the key priorities for the insurance sector involve the following:
- Focusing on sustainability in the investment of insurance companies and pension funds
- Intensifying the monitoring of the premium situation of reinsurers in the non-life sector
- Examining "hidden" cyber risks in insurance policies
- Conducting tests of stochastic valuation models of standard insurance life insurance companies
- Performing in-depth study on how insurance companies using the standard formula deal with economic scenario generators (ESGs) in the evaluation
- Conducting audit and quality assurance of technical provisions in the solvency overview of property and casualty insurance companies
- Preparing for the efficient identification of risk-adequate capital backing through the use of the capital add-ons capital surcharge
- Preparing for Solvency II Review Procedures (Long Term Guarantees Review, Solvency II Review 2020)
Related Links (in German)
- Priorities of BaFin
- Supervisory Priorities for Banking
- Supervisory Priorities for Insurance
- Supervisory Priorities for Securities
Keywords: Europe, Germany, Banking, Insurance, Securities, Supervisory Priorities, Regtech, Brexit, Stress Testing, Solvency II, BaFin
HKMA has published a circular that sets out the regulatory and reporting treatment for loans that participating authorized institutions may grant to eligible borrowers under the 100% Personal Loan Guarantee Scheme.
ECB published the results of the assessment of internal models that banks use to calculate risk-weighted assets for credit, market, and counterparty credit risks.
PRA published a statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme, or MGS.
FCA is consulting, via CP21/7, on the second phase of proposed rules to introduce the UK Investment Firm Prudential Regime (IFPR).
HM Treasury and BoE announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential central bank digital currency in UK.
EIOPA published an opinion to set out its expectations on the supervision of the integration of climate change risk scenarios by insurers in their Own Risk and Solvency Assessment (ORSA).
Bundesbank published two circulars on AnaCredit reporting requirements. Circular 27/2021 covers changes to the reporting of branches, additional attributes to be reported for investment funds from August 01, 2021, and updates to the list of international organizations.
EC published the Implementing Regulation 2021/622 that lays down implementing technical standards for reporting of the minimum requirement for own funds and eligible liabilities (MREL).
BCBS has set out the strategic work priorities, as part of its the work program for 2021-22.
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.