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    EBA Issues Report on Functioning of AML/CFT Supervisory Colleges in EU

    September 01, 2022

    The European Banking Authority (EBA) published its second report on the functioning of anti-money laundering and counter-terrorist financing (AML/CFT) supervisory colleges in the European Union. The European Central Bank (ECB) has tasked five high-level experts on banking supervision with reviewing the effectiveness and efficiency of the Supervisory Review and Evaluation Process (SREP) and how it relates to other supervisory processes.

    Report on AML/CFT supervisory colleges

    In the report, EBA sets out its observations of good practices with an aim to help competent authorities to enhance their effectiveness in future. These include well-structured and organized college meetings by lead supervisors, pro-active participation and sharing of comprehensive information by some members and an effective involvement of prudential supervisors in some colleges. The report also highlights areas for improvement. In particular, it points out that, due to their immaturity, AML/CFT colleges are not yet fully embedded in supervisory processes. The report reminds the supervisors of the importance to exchange information in colleges on an ongoing basis and without delay, particularly where material weaknesses in the institution’s AML/CFT framework have been identified. To further improve the functioning of AML/CFT colleges going forward, EBA staff propose that the lead supervisors and other college members take the following six actions, based on best practices observed in AML/CFT colleges so far:

    • Finalize the structural elements of AML/CFT colleges, including the Cooperation Agreement and Terms of Participation of observers
    • Enhance discussions during the AML/CFT college meetings
    • Foster the ongoing exchange of information within colleges
    • Apply risk-based approach to college meetings
    • Take steps to identify areas for common approach or joint actions
    • Enhance supervisory convergence in AML/CFT colleges

    Expert advisory group

    The five experts appointed by ECB have international backgrounds in banking supervision and were selected based on their extensive experience in the public and private sector and with a view to achieving geographical and gender diversity. They will be acting independently and subject to a confidentiality agreement. They have been appointed in a personal capacity and their participation in the group is unremunerated. The group will engage with major relevant stakeholders and other international experts to gather information and perspectives on supervisory best practices. Its mandate runs until the end of the first quarter of 2023. The following are the members of the expert advisory group:

    • Sarah Dahlgren, Partner, McKinsey & Company; former Executive Vice President, Federal Reserve Bank of New York
    • Matthew Elderfield, former Deputy Governor, Central Bank of Ireland; former Chief Risk Officer, Nordea
    • Ryozo Himino, former Commissioner, Japan’s Financial Services Agency (JFSA); former Secretary General of the Basel Committee on Banking Supervision
    • Fernando Restoy, Chair of the Financial Stability Institute, Bank for International Settlements; former Deputy Governor, Banco de España
    • Carolyn Rogers, Senior Deputy Governor, Bank of Canada; former Secretary General of the Basel Committee on Banking Supervision


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    Keywords: Europe, EU, Banking, AML CFT, Supervisory Colleges, SREP, Operational Risk, Regtech, Basel, EBA, ECB

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