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
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.