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
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