ECB published a report on financial structures in the euro area, which reviews the main structural features of, and developments in, the broader euro area financial sector. The report covers the banking sector (monetary financial institutions, or MFIs), insurance corporations and pension funds, and other financial intermediaries (OFIs).
The first chapter of the report presents the evolution of the overall structure and composition of the financial sector, also analyzing the interconnectedness across different parts of the financial sector to assess possible structural risks to financial stability. The second chapter presents structural developments in the euro area banking sector, providing a wide set of structural information from both a cross-sectional perspective (that is, different banking types, business models, etc.) and a time perspective. The third chapter discusses structural developments in euro area insurance corporations and pension funds. Although the sector continued to grow, it remained strongly concentrated in a relatively small number of countries, with France and Germany each accounting for more than a quarter of this sector in the euro area, followed by the Netherlands (18%) and Italy (10%). The fourth and final chapter reviews the structural features of the euro area non-bank financial sector, including all other financial intermediaries, except insurers and pension funds. Structural features of different parts of the non-bank financial sector are outlined in more detail, namely for non-money market investment funds, money market funds, and financial vehicle corporations.
The report shows ongoing consolidation in the banking sector while assets in the investment fund sector grew by 7% in 2016. Euro area banks’ median common equity tier 1 ratio rose to 15.4 % in 2016, from 14.4 % in 2015. While the median nonperforming loan (NPL) ratio declined further, the stock of NPLs remained persistently high in a number of countries. Solvency position of the insurers and pension funds is well above the requirements of the EU’s Solvency II supervisory regime. This report serves as a complement to the semi-annual ECB Financial Stability Review (FSR), which focuses more on cyclical factors.
Related Link: Report on Financial Structures (PDF)
Previous ArticleESMA Issues Clarification on the Rotation Periods of CRA Analysts
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
EBA has decided to phase out the guidelines on legislative and non-legislative moratoria of loan repayments, in accordance with the earlier specified end of September deadline.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.