The Swedish Financial Supervisory Authority FI set out the work priorities for 2021. The authority will prioritize, among others, climate risks, prevention of money laundering, future risks from COVID-19 pandemic, and consumer protection. During the year, FI will continue to measure the climate-related risks in the portfolios of financial firms. FI will also, based on the pending EU regulations, follow up on the work on sustainability and sustainability reporting. The authority intends for Swedish financial firms to be at the forefront of the application of the new requirements and to follow up on this in its supervision. Additionally, FI plans to participate in the work to develop global standards for sustainability reporting.
Overall, the prioritized work areas for the year can be broadly summarized as follows:
- Monitor the long-term impact of pandemic on the financial system and implement measures, as necessary, to reduce future risks
- Assess how the corporate bond market functions and how the funds that invest in corporate bonds can be better at managing their liquidity risks
- Follow how the firms conducting clearing operations for payments are addressing the outsourcing risks and how the firms maintain good internal governance and control of their operations
- Focus on consumer credit and ensure that lenders conducting thorough credit assessments
- Monitor closely whether the work by smaller banks and payment service firms is sufficiently methodical and structured to prevent money laundering
Keywords: Europe, Sweden, Banking, Securities, COVID-19, Climate Change Risk, ESG, Credit Risk, AML, Corporate Bonds, Reporting, Outsourcing Risk, FI
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards
The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.