BaFin Sets Out Work Objectives for 2022-2025
The Federal Financial Supervisory Authority of Germany (BaFin) has set ten medium-term objectives for 2022 to 2025. These objectives relate to the stability, security, and operational resilience of the supervised companies; the identification of problem companies; the intensification of money laundering prevention; the strengthening of consumer protection; the financial reporting enforcement and market supervision; the consideration of aspects of sustainability and innovation in supervisory activities; and the modernization and human resource development BaFin.
Over the coming years, BaFin intends to make significant progress in all of the identified areas in the following ways:
- BaFin will work to ensure that the financial system and the companies it supervises are resilient to stress in multiple scenarios—particularly interest rate and market scenarios—in terms of both capital adequacy and liquidity adequacy. To this end, BaFin will focus on own scenario analysis and assess the long-term viability of business models, especially in light of digitalization.
- BaFin will monitor the resilience of the companies it supervises—with a focus on their technology platforms—in respect of their operational stability and security. It will focus on combating the sharp increase in cyber risks and the changes in companies’ risk profiles caused by the fragmentation of the value chain, especially due to the outsourcing of material activities and processes.
- BaFin will identify weak companies at an early stage—in addition to the companies with problematic business models, inadequate control systems, or insufficient governance. BaFin will take corrective measures and utilize well-prepared resolution strategies to oversee the market exits that become necessary, seeking to keep losses to a minimum.
- BaFin plans to step-up its supervisory activities in the area of anti-money laundering, will cooperate with all of the relevant entities in efforts to prevent money laundering, and will commit to effective European anti-money laundering supervision.
- BaFin considers issues of sustainability in its supervisory activities and will work to combat greenwashing. The focus will also be on the analysis and mitigation of financial risks for supervised companies and on their compliance with disclosure requirements.
- BaFin has a comprehensive understanding of how new technologies are being used in the market, the risks they involve, and their impact on new and old business models. It will continue to focus on the use of artificial intelligence in finance and the challenges this entails for effective supervision.
Related Links
Keywords: Europe, Germany, Banking, Operational Resilience, Cyber Risk, Disclosures, Artificial Intelligence, Resolution Framework, BaFin
Previous Article
ACPR Issues Updates on RUBA and CREDITIMMO TaxonomiesRelated Articles
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.
