EBA Lists Entities for Benchmarking Exercise, Reviews AML Supervision
The European Banking Authority (EBA) reviewed the competent authorities' approaches to the anti-money laundering and countering the financing of terrorism (AML/CFT) supervision of banks and updated the list of institutions with reporting obligation for the supervisory benchmarking exercise in 2022.
The updated list for the 2022 benchmarking exercise includes 115 banks from 16 countries across the European Union and the European Economic Area. The benchmarking exercise assists competent authorities in assessing the quality of internal approaches used to calculate risk-weighted exposure amounts. The exercise covers approved internal approaches used for own funds requirements calculation of credit and market risk as well as internal models used for IFRS 9. The exercise is an essential supervisory tool to enhance the quality of internal models, which is particularly important in a stressed economic situation. EBA runs this exercise leveraging on established data collection procedures and formats of regular supervisory reporting.
The report on supervisory approaches for AML/CFT reviews how competent authorities in this year’s sample apply the risk-based approach set out in international standards. The EBA findings show that most competent authorities in this year’s sample were committed to strengthening their approach to AML/CFT supervision. Several competent authorities took steps to put in place a holistic approach to tackle money laundering and terrorist financing (ML/TF) risks in the banking sector. Furthermore, AML/CFT teams in almost all EBA-reviewed competent authorities grew significantly and are set to expand further. Moreover, cooperation with prudential supervisors and other AML/CFT supervisors in European Union has become a clear priority for all, in line with the regulatory framework of EBA. The review found that cooperation with the Financial Intelligence Units (FIUs) was not always systematic and continued to be largely ineffective. The report also highlights the common challenges and difficulties in:
- identifying ML/TF risks in the banking sector and in individual banks
- translating ML/TF risk assessments into risk-based supervisory strategies
- using available resources effectively, including by ensuring sufficiently intrusive onsite and offsite supervision
- taking proportionate and sufficiently dissuasive enforcement measures to correct AML/CFT compliance weaknesses
Related Links
- Press Release on List of Institutions
- List of Institutions (XLSX)
- Overview of 2022 Benchmarking Exercise
- Press Release on AML/CFT Supervision
- Report on AML/CFT Supervision (PDF)
Keywords: Europe, EU, Banking, IFRS 9, Basel, Regulatory Capital, AML CFT, ML TF Risk, Benchmarking Exercise, Reporting, Internal Models, Credit Risk, Market Risk, CRD, EBA, Subheadline
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
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).
Asian Governments Aim for Interoperability in AI Governance Frameworks
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.
EBA Proposes Operational Risk Standards Under Final Basel III Package
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.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
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.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.