November 21, 2017

During the structured dialog with the ECON Committee, the EC Vice President (VP) Valdis Dombrovskis discussed planned and ongoing work to make the financial sector in Europe more resilient and integrated. He also discussed the three key objectives of completing the Banking Union, including the framework for the banking sector; accelerating the building of a Capital Markets Union; and embracing new forms of finance, including fintech and sustainable finance.

Mr. Dombrovskis highlighted that the third pillar of the Banking Union—that is, European Deposit Insurance Scheme (EDIS)—is still missing. He noted, "We also need to accelerate the trend of reducing non-performing loans, and prevent the stock from building up again. Next spring, we will present a package of measures on this basis. Among other things, it will include a blueprint for national asset management companies, and possible prudential backstop measures for new loans that turn bad." Alongside the work for a safer banking sector, it must be ensured that rules governing derivatives markets are fit for purpose. Central counterparties, or CCPs, are now a systemic part of the financial sector and their importance is growing. Hence, three self-standing proposals have been presented on the derivatives markets to strengthen financial stability while avoiding undue fragmentation and costs.

With regard to the Capital Markets Union, he stated, "The Commission is working at full speed to create the right conditions for more funding to flow to the real economy. Brexit means the rest of the EU economy needs advanced capital markets more than ever." He also suggested working together to integrate the EU capital markets. One particular focus is to give consumers greater choice and better access to retail financial services, such as the proposal on pan-European personal pension product or PEPP; cross-border payment fees; and proposal (for early next year) to address obstacles to cross-border distribution of funds. Supervision is another focus area, with respect to which targeted changes to the tasks, governance, and funding of ESAs have been proposed. It needs to be ensured that ESAs are equipped to better promote supervisory convergence and to address new challenges and risks. In line with the principle of subsidiarity, expansion of direct EU supervision to certain targeted areas is also being proposed.

Finally, he examined the upcoming challenges and opportunities, such as the emergence of financial technology and sustainable finance. When it comes to financial technology, Europe is well-placed to become a global leader. This will require consistent regulation and appropriate supervision for fintechs to scale up across the single market. EC is working on a Fintech Action Plan for early next year. He concluded that a complete Banking Union, along with the Capital Markets Union, will help build the resilient and integrated financial system that citizens and businesses need.


Related Link: Speech

Keywords: Europe, EU, Banking, Securities, CCP, Banking Union, Capital Markets Union, EDIS, Fintech, Sustainable Finance, NPL, EC

Related Articles
News

IMF Releases Report on 2019 Article IV Consultation with United States

IMF published its staff report in the context of the 2019 Article IV consultation with the United States.

June 24, 2019 WebPage Regulatory News
News

BIS Report Discusses Regulatory Issues Related to Big Techs in Finance

BIS has pre-released a chapter of the BIS Annual Economic Report; this chapter focuses on the risks and opportunities presented by large technology firms in the financial services sector.

June 23, 2019 WebPage Regulatory News
News

IOSCO Report Examines Liquidity in Corporate Bond Markets

IOSCO published a report that examines the factors affecting liquidity, under stressed conditions, in the secondary corporate bond markets.

June 21, 2019 WebPage Regulatory News
News

FED Publishes Results of the 2019 Stress Tests for Banks

FED published a report presenting results of the Dodd-Frank Act Stress Test (DFAST) exercise for 2019.

June 21, 2019 WebPage Regulatory News
News

BCBS Report Examines Global Pillar 2 Supervisory Review Practices

BCBS published a report that examines the Pillar 2 supervisory review practices and approaches in Basel member jurisdictions.

June 21, 2019 WebPage Regulatory News
News

IASB Publishes Work Plan and Meeting Updates for June 2019

IASB published an updated work plan and a summary of its June meeting, which presents preliminary decisions of the Board.

June 21, 2019 WebPage Regulatory News
News

HKMA Publishes Banking Exposure Limits Code Under Banking Ordinance

HKMA issued a circular to all authorized institutions informing that the Banking (Exposure Limits) Code has been published in the Gazette on June 21, 2019.

June 21, 2019 WebPage Regulatory News
News

OSFI Proposes Guideline on Internal Model Oversight for Insurers

OSFI proposed the draft guideline E-25 on the internal model oversight framework for federally regulated property and casualty (P&C) insurance companies.

June 21, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for June 2019

Under the Single Rulebook question and answer (Q&A) updates for this week, EBA published one answer regarding the calculation of institution-specific countercyclical capital buffer rates.

June 21, 2019 WebPage Regulatory News
News

SEC Finalizes Capital and Margin Requirements for Security-Based Swaps

SEC adopted a package of rules and rule amendments to establish capital, margin, and segregation requirements for security-based swaps, under Title VII of the Dodd-Frank Act.

June 21, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3304