EC has published the indicative legislative priorities for the financial sector in EU, for 2021. Recently, the EC President Ursula von der Leyen, the European Parliament President David Sassoli, and the Chancellor Angela Merkel, on behalf of the Presidency of the Council, have signed the joint declaration on 2021 legislative priorities for all sectors, including the priorities for the financial sector in EU. The three presidents also signed the very first joint conclusions on strategic goals and priorities for 2020-2024. Based on the declaration of joint legislative priorities for 2021, EU will prioritize certain initiatives related to risks in the area of sustainable finance, prudential regulation of banks and insurers, completion of Banking Union, deepening of Capital Markets Union, and enhancement of digital operational resilience.
The legislative priorities for 2021 are in line with the EC work program for the coming year. The following are a some of the key initiatives that were included in the list of legislative priorities, with the aim of completing as many of them as possible by the end of 2021:
- In the area of sustainable finance, EU will work on establishing the framework for achieving climate neutrality, establishing an EU green bond standard, addressing sustainable corporate governance, and conducting review of the Non-Financial Reporting Directive.
- Key legislative initiatives related to the Capital Markets and Banking Union include review of the Capital Requirements legislation; proposal for a regulation to establish a European Deposit Insurance Scheme; proposal for a Directive on credit servicers, credit purchasers, and the recovery of collateral; revision of rules for insurance and reinsurance companies (Solvency II); and proposal for a regulation on the exemption of certain third country foreign exchange benchmarks and the designation of replacement benchmarks for certain benchmarks in cessation.
- In context of recovery from the COVID-19 pandemic, work will include proposal for adjustments to the securitization framework and proposal for laying down a general framework for securitization and creating a specific framework for simple, transparent, and standardized securitization.
- Key technology-related initiatives that directly and indirectly impact the financial sector include proposal for a regulation on digital operational resilience for the financial sector (DORA), proposal for a regulation on a pilot regime for market infrastructures based on distributed ledger technology, proposal for a regulation on markets in crypto-assets, proposal for a directive establishing the European Cybersecurity Industrial, Technology and Research Competence Centre and the Network of National Coordination Centers, review of the directive on security of network and information systems, and follow-up to the white paper on artificial intelligence, including on safety, liability, fundamental rights, and data.
Keywords: Europe, EU, Banking, Insurance, Securities, CRR, Solvency II, Securitization Framework, Operational Resilience, Cyber Risk, Credit Risk, Benchmark Regulation, Basel, Work Priorities, EC
Previous ArticleEC Consults on Initiative on European Single Access Point for Data
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.