June 15, 2017

The three ESAs—EBA, ESMA, and EIOPA—published their annual reports for 2016. The annual reports set out the work and achievements of each regulatory agency over the past year, along with their respective key areas of focus in the coming years.

The annual report of EBA provides a detailed account of its achievements in the areas of applicability of Single Rulebook to the EU banking Sector and finalization and implementation of Basel III package in the EU. The Single Rulebook applicable to the EU banking sector was largely completed this year. The report discusses the way EBA continued to improve its role in monitoring and assessing key risks in the banking sector across the EU. EBA also continued to enhance consumer protection; promote transparency, simplicity, and fairness for consumer financial products and services across the Single Market; monitor financial innovation; and contribute to secure and efficient retail payments in the EU. The key focus areas for 2017 include monitoring fintech and its regulatory perimeter; preparing for the 2018 stress test exercise; equivalence assessments; and further supervisory policy development for Supervisory Review and Evaluation Process, Interest Rate Risk in the Banking Book, and information technology and related risks.


The annual report of ESMA details progress toward ESMA's core goals and activities, also highlighting its key achievements in these areas. The key activities involved assessing risks to investors, markets, and financial stability; creating single rulebook; promoting supervisory convergence; and supervising credit rating agencies and trade repositories. In 2016, EIOPA published the results of peer reviews on central counterparties' (CCPs) margins and collateral requirements and updated existing Q&As, in addition to issuing new ones (particularly on Markets in Financial Instruments Directive and Regulation, that is, MiFID II/MiFIR). ESMA also passed an important milestone with the first EU-wide stress test for CCPs, which was also a global first. The second stress test of CCPs is being prepared and will undertake stress test work in the asset management sector in 2017. As regulation on Packaged Retail and Insurance-based Investment Products (PRIIPs) enters into force in 2018, preparing these new rules is high on ESMA's agenda in 2017. Furthermore, the new rules under MiFID II, on the unbundling of research from management fees, will facilitate greater transparency and investor protection.

 

The annual report of EIOPA, in addition, provides a detailed overview of tools and projects that EIOPA used to ensure supervisory convergence, preserve financial stability, and reinforce consumer protection for all policyholders and beneficiaries in the EU. The report provides details regarding the extensive tasks associated with Solvency II, EU-wide insurance stress test, and calculation and publication of risk-free rates on a monthly basis. It also highlights that the implementation of Solvency II on January 01, 2016 was a milestone in the EIOPA's transition from regulation to supervision, underlining the EIOPA's commitment to establishing a common European supervisory culture with consistent supervisory practices across the EU. EIOPA also published its fifth annual report on consumer trends and provided advice to the EC on a number of issues, including the development of a Pan-European Personal Pension Product (PEPP) and, within the context of the Joint Committee, on the Key Information Documents (KIDs) for PRIIPs. EIOPA plans to build on these achievements in 2017 to consolidate its position as a credible supervisory authority by prioritizing the convergence of supervisory practices and playing a role in advancing the EC's agenda in areas such as the Capital Markets Union.


Related Links

EBA Annual Report for 2016 (PDF)

ESMA Annual Report for 2016 (PDF)

EIOPA Annual Report for 2016 (PDF)

Keywords: Europe, EBA, ESMA, EIOPA, EU, Annual Report, Banking, Insurance, Securities, ESAs

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