The European Banking Authority (EBA) has published a speech by Andrea Enria, EBA Chair, given to the European Parliament’s Economic and Monetary Affairs Committee as part of the annual hearing of the chairs of the three European Supervisory Authorities.

Points of interest in the speech include:

  • the EBA is developing standardised templates for non-performing loans (NPLs), as part of a common data infrastructure, which might include common platforms. The EBA is also contributing to the preparation of blue prints for national asset management companies, under the leadership of the European Commission. In addition, the EBA is starting work on guidelines to strengthen banks’ NPL management, building on the work done by the European Central Bank;
  • the EBA notes that in order to support the necessary changes in banks’ liability structures and enhance their resolvability, it is important that the proposed revisions to the Bank Recovery and Resolution Directive are finalised and that resolution authorities provide clear indications on individual minimum requirements on own funds and eligible liabilities targets and where appropriate, finalise joint decisions;
  • the Basel Committee on Banking Supervision’s (Basel Committee) work on international capital standards is drawing to a close and European legislator’s will need to consider the implementation in the EU. The Basel Committee’s work seek to address excessive variability in risk weights calculated by banks which complements the EBA’s bottom-up repair of internal models, which is also being concluded;
  • following the publication of its Guidelines on internal governance and, jointly with the European Securities and Markets Authority, the Guidelines on suitability of management body members and key function holders, the EBA is considering steps to increase the proportionality of its standards and guidelines with a view to reduce the compliance burden in areas such as reporting, Pillar 2 and Pillar 3 – without adverse effects on the level playing field across institutions;
  • the entry into force of the revised Payments Services Directive was a top priority for the EBA. The EBA received a record of number of submissions in its public consultation and a wide array of divergent comments from banks, third party providers, e-commerce players, card schemes and consumers’ associations. The EBA found a delicate balance between competition and security objectives and has flagged its concerns on the European Commission’s proposal to amend the regulatory technical standards in some key aspects;
  • the introduction of new technologies in the provision of traditional banking services is gaining prominence in the EBA’s work programme. Following the reports published on crowdfunding, virtual currencies and big data, the EBA recently issued a broad ranging report on financial technologies, presenting the results of a mapping exercise on innovative firms and their lines of activities and suggesting further work in a number of areas from authorisation and sandbox regimes, to prudential risks and consumer protection issues;
  • in the lights of the decision of the UK to withdraw from the EU, the EBA has identified a series of areas that need common regulatory and supervisory approaches across the other 27 member states, to support a smooth relocation process and avoid regulatory competition. These include authorisations, approval of internal models, treatment of outsourcing, back to back operations and risk transfers, matter related to resolution and deposit guarantee schemes. An opinion on these subjects is going to be finalised in the upcoming days.

View EBA speech highlighting its key areas of work, 9 October 2017