EIOPA published a framework for assessing conduct risk through the product life cycle. The framework focuses on conduct risk throughout all stages of the product life cycle, which includes business model and management risks, manufacturing risks, delivery risks, and product management risks.
The framework clarifies drivers of conduct risk and their implications in the emergence of consumer detriment. It facilitates understanding of issues faced by consumers, along with the input on the types of conduct risks that EIOPA and national competent authorities should focus on. The framework sets a common starting point for more practical supervision of particular products, services, or market segments. While the framework does not set out supervisory processes at the national level, it supports the national competent authorities in identifying conduct and consumer protection risks sufficiently early and clearly for the preventive goals of effective conduct supervision, further enhancing market monitoring and conduct risk assessment and driving forward practical supervisory convergence. It provides a catalog of risks to consider in the practical supervisory work.
EIOPA expects the framework to contribute to the effective implementation of its Conduct of Business Supervision Strategy. EIOPA anticipates further work in linking the identified conduct risks with the tools for assessing their impact and supervisory importance, leveraging readily available data as far as possible. This approach will evolve into a more systematic ongoing conduct risk monitoring as an integral part of practical supervision both at the national and European levels.
Keywords: Europe, Banking, Conduct Risk, Product Life Cycle, EIOPA
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