Author: Selwyn Manning

Source: European Banking Authority

The European Banking Authority (EBA) today published its second Report on the benchmarking of national loan enforcement frameworks across the EU Member States. The Report, which was compiled in response to the EU Commission’s call for advice in the context of the Savings and Investment Union’s agenda, calculates the benchmarks for loan recovery outcomes for the EU 27 aggregates and for the individual Member States. The results highlight a high degree of dispersion among different categories of loans, and across the EU27 Member States, for most of the benchmarks and loan categories. In addition, the Report underscores the importance of certain elements related to both the legal framework and the judicial capacity to improve the recovery outcomes.

As part of the Savings and Investment Union (SIU) agenda, in April 2025 the EBA received from the European Commission a Call for Advice for the purposes of gathering data for benchmarking national loan enforcement frameworks (including insolvency frameworks), from a bank creditor perspective. The EBA was invited to update the work carried out in the first benchmarking exercise in 2020 by applying the same methodology, subject to the necessary adaptations and improvements.

The Report provides a rich and unique set of benchmarks on national insolvency frameworks across 27 EU countries, based on loan-by-loan data. The final representative dataset consists of more than 1.4 million relevant loans at the EU 27 Member State level. Overall, the benchmarks presented in this Report are largely aligned with previous findings. Some differences can be observed at country level and are due to the different data sources and macroeconomic environment, methodological issues and some data quality issues.

The Report covers three asset classes: firms, large corporates and small and medium-sized enterprises (SMEs). The benchmarks are calculated for each asset class for recovery rates (gross and net of all costs), time to recovery, and judicial cost to recovery. For firms, the EU 27 Gross Recovery Rates remain stable compared to the 2020 Report (42.5% in 2018Q4 vs. 42.2% in 2023Q3), while Net Recovery Rates have declined (from 40.6% to 37.6%). Judicial Costs to Recovery have decreased (from 4.3% to 3.5%) and the average Time to Recovery has increased (from 3 years to 4.2 years). These results point to higher incurred costs in enforcement processes beyond pure judicial expenses. The aggregate results mask a high degree of dispersion across the EU 27 Member States for most of the benchmarks and in most loan categories.

The Report also finds that the legal system underlying the enforcement framework is a significant factor to explain the recovery rates and time to recovery. Positive characteristics of the enforcement frameworks that are common to the asset classes considered are, for example: (i) legal instruments to enable out-of-court enforcement of collateral; (ii) the possibility for creditors to influence the proceedings through creditor committees; (iii) the availability of debt re-structuring option for SMEs ; and (iv) pre-existence of triggers for collective insolvency proceedings. However, the extent to which such positive characteristics can enhance the recovery outcomes also depends on the legal origin: in some cases, the prevailing judicial processes seem to be already efficient and recovery outcomes could therefore be less positively affected by reform.

Notes to the editors

In April 20205, the EBA formally received a Call for Advice from the EU Commission to benchmarking national loan enforcement frameworks across individual EU Member States. However, the work started already in 2023 on the basis of a draft Call for Advice that allowed the EBA to start the data work.

Contrary to the 2020 Report, for the current analysis, the EBA requested an extraction of the Eurosystem Analytical Credit Dataset (“AnaCredit”), which contains detailed information on individual bank loans in the euro area submitted using a harmonised reporting format across all Euro-Area Member States. The request was formally approved by the ECB Governing Council in March 2023. To address all the points raised in the Commission’s Call for Advice, a complementary data collection was required, and for non-Euro Area banks, a dedicated data collection was conducted.

For anonymity and confidentiality reasons, the information presented in the Report is in aggregate form, such that individual reporting agents or other counterparties cannot be identified, neither directly nor indirectly.

Source: European Banking Authority

The European Banking Authority (EBA) today responded to the European Commission’s Call for Advice on the key components of the new anti-money laundering/countering the financing of terrorism (AML/CFT) framework. This advice puts forward a risk-based and proportionate approach that will support the swift and effective start of the Anti-Money Laundry Authority (AMLA) operations.

In March last year, the European Commission asked the EBA to advise it on six regulatory mandates that the new AML Authority, AMLA, will ultimately adopt. This ‘Call for Advice’ related to:

• Draft regulatory technical standards (RTS) on the methodology national supervisors will use to assess the inherent and residual risk profiles of obliged entities;
• Draft RTS on the risk assessment AMLA will use to determine which institutions it will directly supervise;
• Draft RTS on the information obliged entities will have to obtain as part of the customer due diligence process under the new AML/CFT regime;
• Draft RTS on the way supervisors will classify breaches of the new regime by severity, and the criteria they will apply when setting the level of pecuniary sanctions or taking administrative measures, or when imposing periodic penalty payments;
• Preparatory work on two additional mandates relating to information exchange within a group and on the base amounts for pecuniary fines.

Where legally possible, the EBA opted for an approach to regulation that fosters effective and efficient outcomes. This approach was informed through extensive stakeholder consultations and close cooperation with EU competent authorities, thus ensuring that the final recommendations are both robust and operationally sound.

Once adopted by AMLA and endorsed by the European Commission, these instruments will provide a solid foundation for a resilient and effective EU AML/CFT system, in line with AMLA’s mandate and statutory objectives.

Legal basis, background and next steps

The EBA has a legal mandate to contribute to preventing the use of the financial system for the purposes of money laundering and terrorist financing. On 31 December 2025, the EBA will transfer this mandate to AMLA. The EBA will remain responsible for tackling financial crime from a prudential perspective and cooperate closely with AMLA.

The EBA’s work on these six regulatory mandates mentioned above stems from the European Commission’s Call for Advice of 12 March 2024. 

Source: European Banking Authority

The European Banking Authority (EBA) published today its final draft Regulatory Technical Standards (RTS) to specify the conditions and the criteria to assess whether the credit valuation adjustment (CVA) risk exposures arising from fair-valued securities financing transactions are material, as well as the frequency of that assessment.

The concept of materiality set out in the draft RTS will determine whether fair-valued securities financing transactions can be exempted from own funds requirements for CVA risk.

The draft RTS set out a quantitative threshold approach that bases the materiality assessment on a ratio that quantifies the relative increase in own funds requirements for CVA risk resulting from the inclusion of fair-valued securities financing transactions in the scope of those requirements. Furthermore, the draft RTS set out a quarterly materiality assessment to ensure consistency with the regular calculation and reporting cycle of own funds requirements by institutions

These draft RTS are part of the Phase 2 deliverables of the EBA roadmap on the implementation of the EU banking package in the area of market risk ​.

Legal basis and background

​Article 382(6) of Regulation (EU) No 575/2013 (Capital Requirements Regulation – CRR), mandates the EBA to develop draft RTS to specify the conditions and the criteria that institutions are to use to assess whether the CVA risk exposures arising from fair-valued securities financing transactions are material, as well as the frequency of that assessment. 

Source: European Banking Authority

The European Banking Authority (EBA) today launched a public consultation on its revised Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) and supervisory stress testing. The revision forms are part of the EBA’s ongoing efforts to simplify and enhance the efficiency of the EU supervisory framework, while supporting a risk-focused and effective supervision.

The draft revised Guidelines bring changes across all the main SREP elements and further clarify the ongoing nature of the SREP to enhance the rationalisation of the supervisory process. They enhance proportionality aspects taking into account the peer review on the application of proportionality in the SREP and the relevant recommendations of the EBA’s Advisory Committee on Proportionality (ACP).

The draft revised Guidelines encompass the new CRD VI mandates on output floor and third-country branches, align with the interest rate risks for banking book (IRRBB) and credit spread risk arising from non-trading book activities (CSRBB) package and incorporate ESG factors and operational resilience.

The revisions also reflect lessons learned from the practical application of the SREP Guidelines since 2016 through:

• placing emphasis on supervisory effectiveness by providing a clearer link between supervisory measures and assessment areas and introducing a high-level and flexible escalation framework for supervisory actions;
• streamlining while enhancing the liquidity and funding assessments;
• further clarifying the communication of the SREP outcomes; and
• enhancing the focus on ICT risk assessment by incorporating the Digital Operational Resilience Act (DORA) framework and existing Guidelines on ICT risk assessment under the SREP (to be repealed) as recommended by the respective peer review.

Consultation process

Comments to the consultation paper can be sent by clicking on the “send your comments” button on the EBA’s consultation page. The deadline for the submission of comments is 26 January 2026.

The EBA will hold a virtual public hearing on 4 December from 10:00 to 12:00 – Paris time. The EBA invites interested stakeholders to register using this link by 1 December (16:00 CET). The dial-in details will be communicated to those who have registered for the meeting.

Legal basis

These draft revised Guidelines have been developed on the basis of Article 107(3) of Directive 2013/36/EU, which mandates the Authority to further specify the common procedures and methodologies for the SREP, in accordance with Article 48n(6)a of Directive 2013/36/EU, which mandates the Authority to further specify the common procedures and methodologies for the SREP and for the assessment of the treatment of material risks of third-country branches, and in accordance with Article 104a(7) of Directive 2013/36/EU, which mandates the Authority to further specify the operationalisation of the output floor.

The revised Guidelines will apply to competent authorities – as defined in Article 4(2), points (i) and (viii) of Regulation (EU) No 1093/2010 – across the EU. Once the revised Guidelines will enter into force, the current SREP Guidelines and the Guidelines on ICT risk assessment under the SREP will be repealed.

Source: European Banking Authority

The European Banking Authority (EBA) today published its fifth and final Report on the Functioning of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Colleges. The Report finds that colleges are effective tools to facilitate information exchange, which improved the effectiveness of AML/CFT supervision within the Union. The Report also finds that a key objective of the framework is yet to be fulfilled, i.e to address issues that affect several group entities in a coordinated manner.

This Report sets out findings and observations from the EBA staff’s monitoring of AML/CFT colleges, which suggest that, overall, competent authorities continued to use colleges to share relevant information that could enhance the effectiveness of supervision. The EBA nevertheless observed that limited progress was made by supervisors in implementing the two key priorities identified in the previous report on the functioning of AML/CFT colleges:

1. Applying the risk-based approach to the functioning of AML/CFT college meetings

   The EBA found that certain supervisors were not yet fully adjusting the functioning of colleges (means used to exchange information and frequency at which the information is exchanged) based on the level of ML/TF risk they presented. As a result, supervisors could not always allocate sufficient resources to the most strategic colleges.

2. Ensuring that discussions on the need for a common approach are meaningful and systematic.

   The EBA found that most colleges that were actively monitored by the Authority still made insufficient efforts to identify common ML/TF risks and AML/CFT issues. As a result, the competent authorities participating in these colleges were often unable to have meaningful discussions on the need for a common approach or joint action.

From 1 January 2026, the responsibility to monitor AML/CFT colleges will be transferred to AMLA. The findings from this report will be relevant for AMLA as it builds its supervisory framework.

Legal basis and background

• AML/CFT colleges are permanent structures that serve to enhance cooperation between different supervisors involved in the supervision of cross-border institutions.
• Directive (EU) 2018/843 (AMLD) introduced an explicit requirement for competent authorities to cooperate with each other but did not provide a framework of how this cooperation should happen in practice.
• The ESAs Guidelines (JC 2019 81) on cooperation and information exchange between competent authorities supervising credit and financial institutions published in December 2019 provide details on how competent authorities should give effect to the cooperation requirements set out in AMLD, by establishing a framework for AML/CFT colleges.

Source: Government of the Netherlands

News item | 21-10-2025 | 14:00

Source: European Banking Authority

The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today presented its 2026 Work Programme, outlining key areas of collaboration for the coming year. The upcoming Programme aims to strengthen the financial system’s digital operational resilience, ensure the continued protection of consumers, and identify risks that could undermine financial stability.

More specifically, the ESAs will undertake joint work in 2026 to:

• ensure the effective operation of the Oversight Framework for critical third-party ICT providers under the Digital Operational Resilience Act (DORA),
• perform joint risk analyses amid ongoing geopolitical tensions and heightened uncertainties,
• further financial education and consumer protection in the EU’s financial sector, including within the context of the European Commission’s Savings and Investments Union (SIU) initiative,
• monitor developments on the securitisation market,
• collaborate on other cross-sectoral matters such as financial conglomerates, innovation facilitators and credit assessment institutions,
• and support the planned review of the Sustainable Finance Disclosure Regulation (SFDR).

Notes

The Joint Committee is a forum with the objective of strengthening cooperation between the three ESAs, where they regularly and closely coordinate their supervisory activities in the scope of their respective responsibilities ,and ensure consistency in their practices.

In particular, the Joint Committee works in the areas of micro-prudential analyses of cross-sectoral developments, risks and vulnerabilities for financial stability, retail financial services and consumer and investor protection issues and retail investment products, cybersecurity, financial conglomerates, accounting and auditing. More information about the Joint Committee is available here.

Source: European Banking Authority

The European Banking Authority (the EBA) today published its annual Report on convergence of supervisory practices for 2024 across the European Union (EU). The Report details the EBA’s extensive efforts to strengthen the alignment of supervisory approaches across Member States and across all dimensions of its activities: prudential, resolution, consumer protection, digital finance and, until the end of 2025, anti-money laundering/countering the financing of terrorism (AML/CFT). This is also a first step in implementing the recommendations set out in the EBA’s Report on the efficiency of the regulatory and supervisory framework. Going forward, the EBA will further deepen its focus on supervisory outcomes to ensure consistent and robust supervision across the EU.

Key highlights

In the area of prudential supervision, the EBA’s European Supervisory Examination Programme (ESEP) for 2024 focused on liquidity and funding risk, interest rate risk and hedging, and recovery operationalisation. The Report notes stable risk levels across these areas, while identifying ongoing challenges such as data quality, stress testing scenarios, and modelling assumptions. The EBA will continue to monitor risks related to online deposit platforms and compliance with Supervisory Outlier Tests (SOTs) in 2025.

On resolution and crisis management, significant progress has been made in operationalising resolution tools, particularly the bail-in mechanism in cross-border environments. The EBA highlights improved coordination among authorities and stakeholders, enhanced management information systems, and ongoing efforts to address challenges in data quality and legal recognition of bail-in actions.

On digital finance, the EBA prioritised preparations for the implementation of the EU’s Markets in Crypto-Assets Regulation (MiCA), focussing on the supervision of asset reference token (ART) and e-money token (EMT) issuers. It also developed an EU-wide supervisory handbook and coordinated workshops to ensure convergence in supervisory approaches from the outset.

In the area of consumer protection and AML/CFT, the Report notes improved cooperation and risk-based supervision among national authorities, with notable progress made through AML/CFT college monitoring and implementation reviews. The EBA is preparing for the transition of AML/CFT supervisory responsibilities to the new EU Anti-Money Laundering Authority (AMLA) at the end of 2025.

On cross-cutting activities, the EBA continued to support convergence through peer reviews, Q&As, breach of Union law investigations, and training programmes for competent authorities. In 2024, the EBA delivered 23 courses to over 3,000 participants, thus strengthening supervisory skills and promoting best practices across the EU.

Legal basis, background and next steps

This annual Report is a first step in implementing recommendation 17 of the EBA’s report on the efficiency of the regulatory and supervisory framework (EBA/REP/2025/26) in which the EBA committed to providing a more detailed account of supervisory convergence in the EU, building on a number of initiatives and efforts it has already engaged into with its members. The focus of the EBA’s work may shift on ensuring proper implementation of the existing rulebook through supervisory convergence action.

In line with Article 1(5)(g) and 29 of its founding regulation, the EBA contributes to enhancing supervisory convergence across the European Union and plays an active role in building a common supervisory culture and ensuring the consistent application of the Single Rulebook.

In the context of the Supervisory Review and Evaluation Process (SREP), the EBA annually reports to the European Parliament and the Council on the degree of convergence of the application of the SREP and supervisory measures as mandated by Article 107 of the Capital Requirements Directive (CRD).

With the Single Rulebook now well established, the EBA will gradually increase the importance of its convergence work relative to policy development. The Authority remains vigilant in addressing emerging risks and ensuring the stability and integrity of the EU banking sector.

Source: European Banking Authority

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have issued their technical advice in response the European Commission’s Call for Advice (CfA) on the Investment Firms Regulation (IFR) and Investment Firms Directive (IFD). They propose limiting significant changes to the framework, which has proven to be fit-for-purpose, as confirmed by stakeholder feedback during the joint consultation.

The recommendations aim to:

1. enhance the proportionality and functioning of the prudential framework;
2. improve the framework’s ability to contribute to a level playing field among investment firms, and between investment firms and financial institutions that perform similar activities.

The joint report highlights the areas where higher or lower alignment with the banking framework would be beneficial. It also identifies the need to improve definitions, calculation methodologies, and thresholds monitoring for investment firms, while emphasising the importance of harmonising the scope of calculation to ensure consistent application of the framework.

In addition, the report addresses a wider range of topics, including the adequacy of own funds requirements, the implications of the Banking Package, the prudential consolidation of investment firm groups, and aspects related to remuneration. It also considers the interactions between the IFR/IFD framework and other regulations, namely the Market in Crypto-Assets Regulation (MiCA), the Undertakings for Collective Investment in Transferable Securities (UCITS), and the Alternative Investment Funds Managers (AIFM) Directives.

Next steps

The EBA and ESMA will submit the joint report to the European Commission.

Legal basis and background

Under Article 16a(4) of their founding regulations, the EBA and ESMA may provide technical advice at the request of the EU Commission, in areas defined in the legislative acts referenced in Article 1(2) of their respective founding regulations.

This report was prepared in response to the “Call for advice to the EBA and ESMA for the purposes of the reports on the prudential requirements applicable to investment firms”, published on 1 February 2023. The CfA asked to cover, among others, the areas of categorisation of investment firms, the interaction with CRR/CRD, and the future proofing of the IFR/IFD regime.

Source: European Banking Authority

The European Banking Authority (EBA) today published a Report on white labelling, i.e. a business model in which a financial institution works with another company (partner)—sometimes not even a financial firm—to offer products and services under the partner’s brand. The EBA found that over a third of banks surveyed in 2025 use this model and sees a need for ongoing supervisory convergence on the model that it intends to take forward in 2026.

Driven by digitalisation and platformisation, new ways for people to access financial services are emerging, including via white labelling that is being used by 35% of the banks responding to the EBA 2025 Spring Risk Assessment Questionnaire (RAQ). White labelling is a business model which involves a financial institution (the provider) entering into an agreement with another financial or non-financial firm (the partner), to offer one or more financial products and services under the partner’s own brand only. Traditionally partners were also financial institutions but, increasingly, are non-regulated commercial entities (e.g. those operating online marketplaces).

The Report sets out the key features of white labelling, provides an overview of use cases, and identifies potential opportunities and risks. For consumers, risks include less clarity about who is responsible for the product, which can make it harder to know who to contact or to avoid fraud. For supervisors, it can mean less direct oversight of some partners.

The Report sets out follow-up actions the EBA will take in 2026 to promote a common supervisory approach towards these models and improve consumer understanding, including:

(i) raising supervisory awareness, having integrated white labelling in competent authorities’ supervisory priorities for 2026; and

(ii) ensuring more effective disclosures to consumers to facilitate their awareness as regard the firm they are dealing with and how to make complaints.

Legal basis and background

The EBA has a statutory duty to monitor and assess market developments, including technological innovation and innovative financial services (Article 9(2) of the EBA Founding Regulation).

The EBA’s priorities on innovative applications for 2024-25, included white labelling of financial products and services as part of the broader topic of value chain developments.

A factsheet accompanies the publication of the report.