Featured Product

    ESAs Publish Report on Risks in the Financial System in EU

    September 21, 2017

    The Joint Committee of the ESAs published its Autumn 2017 report on risks and vulnerabilities in the financial system in EU. The report highlights the challenges arising from fintech developments, along with the potential financial stability risks arising from the withdrawal of the UK from the EU.

    Uncertainties around the terms of withdrawal of the UK from the EU have the potential to expose the EU27 and the UK to economic instability and to weaken market confidence. Such a situation could cause disruptions to the legal framework for financial services and the continuity of financial contracts between parties in the EU27 and the UK. As passport arrangements enabling the EU and UK-domiciled financial entities to operate in each other’s jurisdictions will expire, business continuity planning is essential. Additionally, the report highlights that rapid developments in the area of fintech are raising new opportunities and challenges for financial institutions and final users. Data privacy issues, potential client discrimination, vulnerability to cyber-crime, and associated legal issues are among the key risks to consumers and financial institutions. The report also presents regulatory and supervisory initiatives to monitor and mitigate the identified risks.

     

    Persistent low profitability of banks and insurers also remains a major challenge. Still high levels of nonperforming loans, or NPLs, and the need to adapt business models, including the need for substantial investment in technological infrastructures, aggravate profitability challenges. The combination of low yields, low economic growth and low asset quality in some countries continues to affect EU insurers, as both life and nonlife insurers are largely exposed to interest-rate-sensitive assets, and business models may encompass interest-rate-sensitive product lines. The Joint Committee had earlier published a report identifying risks and vulnerabilities in the EU financial sector in April 2017.

     

    Related Links

    Report on Risks and Vulnerabilities in EU, September 2017 (PDF)

    Joint Committee Report, April 2017 (PDF)

    Keywords: Europe, EU, Banking, Insurance, Brexit, Passporting Regime, NPLs, Fintech, ESAs

    Related Articles
    News

    APRA Decides to Keep Countercyclical Capital Buffer for Banks at 0%

    APRA announced its decision to keep the countercyclical capital buffer (CCyB) for authorized deposit-taking institutions on hold at zero percent.

    December 11, 2019 WebPage Regulatory News
    News

    APRA Issues Operational Risk Rules, Consults on Reporting Requirements

    APRA published an updated prudential standard APS 115 that sets out operational risk requirements for authorized deposit-taking institutions in Australia.

    December 11, 2019 WebPage Regulatory News
    News

    EBA Issues Revised List of Validation Rules for Reporting by Banks

    EBA published a revised list of validation rules in its implementing technical standards on supervisory reporting.

    December 10, 2019 WebPage Regulatory News
    News

    SRB Holds Annual Conference, Reflects on Turning Policy into Action

    SRB published a report on its fourth annual conference that was held on October 10, 2019 in Brussels.

    December 10, 2019 WebPage Regulatory News
    News

    OSFI Sets Domestic Stability Buffer Level at 2.25%

    OSFI has set the Domestic Stability Buffer, or DSB, at 2.25% of total risk-weighted assets, with effect from April 30, 2020.

    December 10, 2019 WebPage Regulatory News
    News

    FED Extends Consultation Period for Capital Requirements for Insurers

    FED is extending comment period for the proposed rule establishing risk-based capital requirements for depository institution holding companies that are significantly engaged in insurance activities.

    December 10, 2019 WebPage Regulatory News
    News

    FSB Examines Financial Stability Aspects of Bigtech and Cloud Services

    FSB published two reports that consider the financial stability implications from the offering of financial services by bigtech firms and the adoption of cloud computing and data services across a range of functions at financial institutions.

    December 09, 2019 WebPage Regulatory News
    News

    HKMA Proposes Changes to Module on Supervision of Concentration Risk

    HKMA issued a circular proposing revisions to the Supervisory Policy Manual module CR-L-1 on consolidated supervision of concentration risks under the Banking (Exposure Limits) Rules (BELR) Rule 6.

    December 09, 2019 WebPage Regulatory News
    News

    BoE Updates XBRL Filing Manual for Reporting Under Solvency II

    BoE has updated the XBRL filing manual (to Version 5.0) to help firms and software vendors create XBRL instance documents for Solvency II Pillar 3 and BoE Insurance reporting.

    December 09, 2019 WebPage Regulatory News
    News

    APRA Specifies Capital Treatment of Equity Investments in ABGF

    APRA published a letter to the authorized deposit-taking institutions outlining the regulatory capital treatment of their equity investments in the Australian Business Growth Fund (ABGF).

    December 09, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4301