EC adopted the work program for 2021. The work program contains new legislative initiatives across the six headline ambitions of President von der Leyen's Political Guidelines, including initiatives to achieve a climate-neutral Europe by 2050 and to put forward a roadmap of clearly defined 2030 digital targets, with focus areas including cybersecurity and data aspects of artificial intelligence. The Annexes to work program include lists of the new policy and legislative initiatives, the Regulatory Fitness and Performance program (REFIT) initiatives to simplify existing regulation, the priority pending proposals, and the intended withdrawals of pending proposals for the financial sector.
In the work program, the new initiatives for the financial sector in EU mainly relate to the:
- Completion of the Banking Union through the revision of the bank crisis management and deposit insurance framework (legislative, incl. impact assessment, Article 114 TFEU, Q4 2021).
- Completion of the Capital Markets Union through the investment protection and facilitation framework (legislative, incl. impact assessment, Article 114 TFEU, Q2 2021), revision of prudential rules for insurance and reinsurance companies (Solvency II) (legislative, incl. impact assessment, Articles 53(1), 62 and 114 TFEU, Q3 2021), and revision of the Markets in Financial Instruments Directive and Regulation (legislative, incl. impact assessment, Article 114 TFEU, Q4 2021).
- Mitigating climate change through sustainable corporate governance (legislative, incl. impact assessment, Articles 50 and, possibly, 114 TFEU, Q2 2021) and establishment of an EU green bond standard (legislative, incl. impact assessment, Article 114 TFEU, Q2 2021)
- Anti-money laundering through a legislative package (legislative, incl. impact assessment, Article 114 TFEU, Q1 2021)
In terms of pending initiatives, the priority proposals relevant for financial sector include the proposal for a regulation on:
- Regulation on digital operational resilience for the financial sector and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, and (EU) No 909/2014
- Regulation on pilot regime for market infrastructures based on distributed ledger technology
- Regulation on markets in crypto-assets and amending Directive (EU) 2019/1937
- Regulation amending Regulation (EU) 2016/1011 as regards the exemption of certain third-country foreign exchange benchmarks and the designation of replacement benchmarks for certain benchmarks in cessation
- Regulation amending Regulation (EU) No 575/2013 as regards adjustments to the securitization framework to support the economic recovery in response to the COVID-19 pandemic
- Regulation amending Regulation (EU) 2017/2402 laying down a general framework for securitization and creating a specific framework for simple, transparent and standardized securitization to help the recovery from the COVID-19 pandemic
- Regulation on credit servicers, credit purchasers, and the recovery of collateral
- Regulation amending Regulation (EU) 806/2014 to establish a European Deposit Insurance Scheme
Keywords: Europe, EU, Banking, Insurance, Securities, Climate Change Risk, ESG, Work Program, Basel, Solvency II, Regtech, EC
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PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.
US Agencies (FDIC, FED, and OCC) issued a joint statement encouraging banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021, to facilitate an orderly LIBOR transition.
The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS, endorsed a coordinated approach to mitigate COVID-19 risks to the global banking system.
HM Treasury extended the consultation period on Phase II of the Future Regulatory Framework (FRF) Review, from January 19, 2021 to February 19, 2021.
ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.
BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.
PRA published the policy statement PS23/20 on the calculation of stressed value at risk (sVAR) and risks not in value at risk (RNIV) under the market risk framework.
BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.