Featured Product

    ESRB Publishes Annual Report for 2019

    ESRB published the ninth annual report, which details its achievements and activities between April 01, 2019 and March 31, 2020. This annual report includes the ESRB assessment of risks up to June 2020 and reflects the new systemic risks that have emerged as the European economy has endured an extraordinary macroeconomic shock due to COVID-19 pandemic. ESRB has progressively reviewed and updated its systemic risk assessment to account for the new risk landscape resulting from the pandemic. The identified risks include widespread defaults in the private sector as a result of a deep global recession; the challenging macroeconomic environment for banks, insurers, and pension schemes; the re-emergence of sovereign financing risk; and instability and pockets of illiquidity in financial markets.

    The risk assessment of ESRB also includes threats originating from a system-wide cyber incidents, disruption to critical financial infrastructure, and climate change and transition risks, all of which remain critical for longer-term financial stability. Out of the seven identified key systemic risks, one has been assessed to be a severe systemic risk, four have been assessed to be elevated systemic risks, and two have been assessed to be systemic risks. The assessment takes into account policy measures taken at the EU and national levels to mitigate the effects of the COVID-19 pandemic. Prior to the start of the COVID-19 pandemic, ESRB had issued warnings and recommendations on medium-term residential real estate sector vulnerabilities to competent ministers in eleven of its member jurisdictions. In addition, it had amended an earlier recommendation on closing real estate data gaps. Other key achievements of ESRB during the year are as follows:

    • Provided an opinion to the Council, EC, and Finland, noting that an extension of a stricter national measure by Finland is deemed necessary for the effective mitigation of the systemic risks and the threats deriving from the Finnish housing market.
    • Applied the reciprocity framework and recommended reciprocation of national flexibility measures for residential real estate exposures in Belgium, Estonia, and the Netherlands. 
    • Contributed to ensuring resilience of the banking sector by considering the macro-prudential implications of financial instruments that are measured at fair value and classifying them as Level 2 or Level 3 instruments for accounting purposes and by contributing to the EU-wide stress test of EBA. 
    • Considered policy options to mitigate the procyclicality of margins and haircuts in derivatives markets and securities financing transactions; ways to strengthen the recovery and resolution of central counterparties; and ways to enhance the macro-prudential aspects of the Solvency II rules for insurers.
    • Noted changes arising from coming into effect of the revised ESRB Regulation, including changes to its governance and enhancements of its accountability framework.
    • Held its annual meeting with the Committee of European Audit Oversight Bodies and statutory auditors of EU-based global systemically important financial institutions (G-SIFIs). The meeting focused on the implementation of IFRS 9, the valuation of complex financial instruments, preparatory work for IFRS 17, the European macroeconomic environment, anti-money laundering and fraud, and key audit matters.
    • Held the fourth Annual Conference wherein the participants exchanged their experiences of macro-prudential policies and discussed the role of non-banks in the economy and the financial system, cyber-security and its potential implications for systemic risk, and whether the regulatory reforms of the financial system had been completed.


    Related Link: Annual Report (PDF)


    Keywords: Europe, EU, Banking, Insurance, Securities, Macro-Prudential Policy, Systemic Risk, Stress Testing, COVID-19, Climate Change Risk, ESG, Solvency II, IFRS 9, IFRS 17, Annual Report, Cyber Risk, ESRB

    Featured Experts
    Related Articles

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521