EBA published an opinion on the link between money laundering and terrorist financing (ML/TF) concerns and prudential objectives. This opinion forms part of the ongoing work of EBA to strengthen the fight against ML/TF in Europe and responds to a request in the Council Anti Money Laundering Action Plan of 2018. With this opinion, EBA invites prudential supervisors to send a common message to institutions that prudential supervisors factor anti-money laundering/countering the financing of terrorism (AML/CFT) issues into the prudential supervisory process and cooperate closely with AML/CFT supervisors for this purpose.
ML/TF can have a significant, adverse impact on an institution's safety and soundness. This is why prudential supervisors need to be aware of, and act on, ML/TF risks, which may pose prudential risks to the institutions they supervise and in particular:
- When considering whether to authorize an institution or when assessing proposed acquisitions of qualifying holdings
- As part of their ongoing supervision of institutions, for example, when assessing the adequacy of the governance and risk management systems of an institution
- When taking corrective measures to address potential weaknesses from a prudential perspective
EU legislators have taken a number of steps to clarify and strengthen the important link between AML/CFT and prudential issues and to complement the existing legal framework in EU. These steps include amendments to the Capital Requirements Directive (CRD), which further clarify the link between prudential supervision and AML/CFT supervision and require prudential supervisors to act on AML/CFT information. The EU Council made clear in its action plan of 2018 that the link between ML/TF risk and prudential objectives means that prudential and AML/CFT supervisors must cooperate closely and share information in the discharge of their respective functions. Where institutions operate across borders, EBA expects supervisors to cooperate with their international counterparts.
Keywords: Europe, EU, Banking, AML/CFT, ML/TF, SREP, AML Action Plan, CRD, Prudential Supervision, EBA
Previous ArticleECB Vice President Discusses Evolution of Stress Testing in Europe
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
HM Treasury announced that G7 Finance Ministers and Central Bank Governors met ahead of COP 26, the 2021 UN Climate Change Conference, and agreed on green agenda.