Featured Product

    EBA Assesses Application of Regulatory Standards on Identified Staff

    January 16, 2020

    EBA published its report on the application of the regulatory technical standards on criteria to identify categories of staff whose professional activities have a material impact on the risk profile of an institution. This peer review aims to assess the supervisory practices followed and measures taken by competent authorities with respect to the requirements of the technical standards. The results of the review show that, within the European Economic Area, the competent authorities have properly applied the technical standards during the reference period from January 01, 2015 to December 31, 2017.

    To gain a deep understanding of the identification process, which begins with practices within the institutions, the review panel selected a small number of institutions forming a representative sample, including one significant institution for each member state and two less significant institutions. These institutions were requested to provide data on the numbers of staff members identified under the qualitative and quantitative criteria set out in the technical standards and through the application of additional internal criteria. This assessment was intended to enable EBA and the review panel to flag any issues that institutions face in the application of the EBA requirements, along with any possible interpretation issues or loopholes resulting from the current text of the technical standards. This report highlights the following observed best practices:

    • Competent authorities collect information from institutions to ensure that the required information is all included in the documentation.
    • Institutions have a notification and prior approval process regarding exemptions for identified staff under Article 4(4) and (5) of the technical standards.
    • The application of exemptions for individual staff is assessed under Article 4(2) to (4) of the technical standards.
    • The use of supervisory tools for assessing the compliance of institutions.

    Additionally, the review panel identified certain weaknesses in the application of some parts of the technical standards. Competent authorities typically follow a risk-based approach, though some of them have some difficulties to distinguish their standard risk-based methods of supervision and the application of the proportionality principle. This leads to diverging approaches and, in a few cases, to the exclusion of certain institutions from the supervisory review on a systematic basis. The review panel suggested conducting a targeted review of the application of the technical standards after their amendment, following the entry into force of the Capital Requirements Directive or CRD5 (2019/879/EU). However, time should be allowed before this review takes place, as both supervisors and institutions will need time to implement CRD5 and the amended technical standards on identified staff. The review will aim to ensure that the competent authorities have addressed the observed weaknesses in a consistent manner.

     

    Related Links

    Keywords: Europe, EU, Banking, Operational Risk, Peer Review, Competent Authorities, Regulatory Technical Standards, Remuneration, CRD5, EBA

    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629