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

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7307