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Source: European Banking Authority

The European Banking Authority (EBA) today published its updated methodology for the assessment of regulatory and supervisory frameworks of non-EU countries. The changes reflect the amendments to the revised Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRD).

The methodology used to perform a thorough assessment of the jurisdiction’s regulatory and supervisory framework is based on the following two questionnaires published on the EBA’s website:

• The 1^st step questionnaire consists of a preliminary screening to determine whether the main requirements and principles are in place.
• The 2^nd step questionnaire is a more in-depth examination, systematically mapping provisions of the EU framework with that of the non-EU country.

Further to aligning the methodology with the latest regulatory developments, the EBA also streamlined its 2^nd step questionnaire to improve the overall user experience.

Finally, the content of the questionnaires was moved to an online platform, allowing countries to reply directly via a secured digital format. Upon request, interested non-EU jurisdictions may get a dedicated access to this platform. They may contact the EBA for further information (Equivalence@eba.europa.eu).

Legal Basis and background

Article 33(2) provides that the EBA shall assist the European Commission in preparing equivalence decisions pertaining to regulatory and supervisory regimes in non-EU countries following a specific request for advice from the European Commission or where required to do so by the legislative acts referred to in Article 1(2) of Regulation (EU) 2010/1093.

Source: European Banking Authority

EMBARGOED UNTIL 20 MARCH 2025 AT 11:00 CET

The European Banking Authority (EBA) today published its Q4 2024 Risk Dashboard (RDB), which discloses aggregated statistical information for the largest EU/EEA institutions.

• EU/EEA banks reported a return on equity (RoE) of 10.5% in 2024, an increase of 10bps compared to 2023 (11.1% in Q3 2024). The return on assets for 2024 stood at 0.73%, up from 0.69% in 2023 (0.76% in Q3 2024).
• The net interest margin (NIM) decreased by 1bp to 1.66% on a quarterly basis, decreasing further from its peak level of 1.69% in March 2024. Despite the slowdown in net interest income (NII), the total income of EU/EEA banks benefited from a consistent rise in net fee and commission income (NFCI), which grew by 6.1% QoQ and 9.6% YoY (see figure 1).
• EU/EEA banks reported a quarterly increase of over 1% in loans to households and non-financial corporations (NFCs) across nearly all jurisdictions. Cash balances fell by close to 7% quarter-on-quarter (QoQ). At country level, most countries reported an increase in sovereign exposures. At EU/EEA level, they rose by more than 3% compared to Q2 2024 (EUR 118bn) to EUR 3.64tn (see figure 2).
• The asset quality of EU/EEA banks remained stable, with non-performing loans (NPLs) decreasing by 1.1% QoQ, amounting to EUR 375bn. All segments reported a reduction in NPLs, except for commercial real estate (CRE) loans with a marginal increase. Stage 2 loans rose by 2.6%, reaching EUR 1.57 trillion and accounting for 9.7% of the total loan portfolio (9.5% in Q3). The cost of risk held steady at 49 basis points, although substantial differences among countries remain.
• On a fully loaded basis, EU/EEA banks’ common equity tier 1 (CET1) ratio held steady at 16.0%, a sign of the sector’s strong capitalisation. Risk weighted assets increased by close to 1.1%, as a result of further increases in credit and operational risks (see figure 3).
• The liquidity coverage (LCR) and net stable funding (NSFR) ratios experienced a minor adjustment in the last quarter, and stood at 163.4% (compared to 161.5% in Q3), and 127.1% (127.2% in Q3) respectively. Both ratios were well above their minimum requirements. The loan-to-deposit ratio for households and NFCs further declined to 104.9% due to deposits increasing faster than loans over the quarter. Deposits from households and NFCs grew by 2.8% in the last quarter.

Note: Due to data resubmissions, Q3 data have been restated and, therefore, slightly adjusted compared to previous publications.

Source: European Banking Authority

EMBARGOED UNTIL 20 MARCH 2025 AT 11:00 CET

The European Banking Authority (EBA) today published key indicators on climate risk in the EU banking sector, based on information published by banks as part of their Pillar 3 ESG disclosures. This new dashboard is a first step in establishing a broader ESG risks monitoring framework and allows centralised access to comparable climate risk indicators. It also provides relevant benchmarks and enhances the assessment and monitoring of transition and physical climate-related risk across the EU/EEA banking sector.

The EBA has a traditional role in gathering data and analysing risks to facilitate the stability and effectiveness of the EU banking sector. The monitoring of ESG risks is a new initiative. This new interactive monitoring tool covers, for the time being, climate risk only, thus reflecting the scope of the quantitative Pillar 3 disclosures.

The data shows substantial EU/EEA banking sector exposure to sectors highly contributing to climate change, with average exposure shares to these sectors above 70% in most countries. Banks reported the share of exposures in areas subject to elevated physical risk below 30% on average, but the level of granularity of assessment differs across banks. The data further indicates a notable portion of loans secured by immovable property falling within the highest energy efficiency score buckets, although banks make considerable use of proxies and estimates.

The indicators are built based on data with reference dates of 31 December 2023 and 30 June 2024. The EBA intends to regularly update the indicators and to further develop the monitoring framework over time.

Legal basis

The ESG risk indicators have been developed in accordance with Article 29(f) of the EBA founding regulation (Regulation EU 1093/201), requiring the EBA to put in place a monitoring system to assess environmental, social and governance-related risks taking into account the Paris Agreement to the United Nations Framework Convention on Climate Change.

Moreover, the development of the ESG risk monitoring framework supports the Commission’s objective to systemically monitor climate-related financial stability risks. 

Source: Government of the Netherlands

News item | 19-03-2025 | 10:45

The Ministerial Meeting in Amsterdam includes meetings to ensure more EU private investments in digital technologies and to improve access to financing for startups and scale-ups. The ministers will also discuss challenges regarding connectivity. Such as increasing the supercomputing capacity within the EU to be able to develop innovations in the field of both digital infrastructure and technology. During the D9+ the participating Ministers will also have meetings on artificial intelligence. Discussions will be held on topics like developing innovative AI technology and AI infrastructure within the EU and the use of AI in public services. During these meetings various guest speakers will also provide insight into how business investments can be stimulated.

The following Ministers from the D9+ Group will be in Amsterdam for the summit: Caroline Stage (Minister for Digital Affairs; Denmark), Liisa-Ly Pakosta (Minister of Justice and Digital Affairs; Estonia), Niamh Smyth (Minister of State for Trade, Promotion, AI and Digital Transformation; Ireland), Elisabeth Margue (Minister Delegate to the Prime Minister for Media and Connectivity; Luxembourg), Dariusz Standerski, Secretary of State for Digital Affairs; Poland); Margarida Balseiro Lopes (Minister for Youth and Modernization; Portugal), Ksenija Klampfer (Minister of Digital Transformation; Slovenia), Oscar Lopez Águada (Minister for Digital Transformation and Civil Service; Spain), Marian Jurečka, Minister of Labour and Social Affairs; Czech Republic), Erik Slottner (Minister for Public Administration; Sweden). The representatives from Belgium and Finland have to be confirmed yet.

The participating ministers have the ambition to deliver a final declaration which Minister Beljaarts will hand over to EU Commissioner Virkkunen. At the same time as the D9+ Ministerial Meeting both business federations (B9+) and start-up and scale-up organizations (S9+) from the thirteen countries involved will meet in Amsterdam.

Origin of D9+

In 2016, Sweden launched an initiative called ‘Digital Frontrunners’ following a report in which nine EU member states were designated as frontrunners. Four additional countries have since become members of the D9+. The Ministers meet informally twice a year to work together on their ambitions in the field of digital economy and technology. There is a rotating presidency. After the Netherlands, Portugal will organize the next D9+ in the second half of 2025.

Source: European Banking Authority

The European Banking Authority (EBA) today launched a call for papers in view of its 14th Policy Research Workshop taking place on 18-19 November 2025 and titled “Bridging capital and growth – the role of financial structures and intermediaries”. The deadline for submitting papers is 6 June 2025.

The workshop aims to bring together economists and researchers from supervisory authorities and central banks, as well as leading academics, to discuss and explore policies that can ensure innovation in a context of competition and risk arbitrage, while ensuring financial stability.

In preparation for the workshop, the EBA invites the submission of policy-oriented, preferably empirical, research papers on the following topics:

• the impact of global capital flows on market efficiency and the role of financial intermediation;
• access to finance by entrepreneurs ensuring that capital is used in the most productive ways;
• provision of mechanisms for managing risk and how regulatory frameworks can contribute to the functioning  and stability of financial intermediaries;
• incorporation of environmental, social, and governance (ESG) to support sustainable development and growth;
• progress in digital finance initiatives and better alignment with regulation and policies.

Interested parties can download here the detailed call for papers, which includes additional information on the proposed topics for the papers, composition of the programme committee and contact details for the submission of papers. The submission deadline is 6 June 2025.

Contributors will be notified by mid-September 2025.

Source: European Banking Authority

The European Banking Authority (EBA) today published its final draft Implementing Technical Standards (ITS) amending the existing Implementing Regulation on the joint decision process for internal model authorisation under the Capital Requirements Regulation (CRR). The revised ITS incorporate changes to the EU legal framework. This final draft amending ITS are part of the first phase of the EBA roadmap for implementing the EU Banking Package.

The key amendments include:

• a revised scope for the use of internal models for regulatory purposes under CRR III, where the possibility of applying these models for operational risk has been removed. As a result, references to the Advanced Measurement Approach (AMA) have been deleted from the scope of the revised ITS.
• updated references to the ITS and Regulatory Technical Standards (RTS) on the functioning of supervisory colleges, reflecting changes in the revised supervisory colleges regulatory framework.

Legal basis

These final draft ITS have been developed in accordance with Article 20(8) of the Regulation (EU) 575/2013 (CRR), as amended by the Regulation (EU) 2024/1623 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (CRR III).

Source: European Banking Authority

The European Banking Authority (EBA) today launched a public consultation on draft Regulatory Technical Standards (RTS) on the threshold of activity at which Central Securities Depositories (CSDs) providing ‘banking-type ancillary services’, need to meet certain prudential risk management requirements set out in the Central Securities Depositories Regulation (CSDR). The aim of this work is to allow CSDs to do more settlement of foreign currency in commercial bank money without increasing the risk in CSDs or the overall financial system. This consultation runs until 16 June 2025. A public hearing will be held on 13 May.

The EBA is proposing a threshold with staggered requirements dependent on a CSD’s level and type of activity in banking-type ancillary services. This is to ensure that the threshold is risk sensitive and proportionate, without impacting market stability.

The EBA’s analysis included in this consultation paper shows that the maximum level of activity a CSD can provide before having to meet the requirements set out in CSDR is 2.5% of the total value of all securities transactions against cash settled in the books of the CSD over one year. This accounts for up to EUR 6.25 billion per year. Below 1.5% and up to 3.25bn, CSDs would only have to meet basic prudential requirements on credit worthiness, liquidity risk management policy and procedures, and a recovery plan.

Consultation process

Responses to the consultations can be sent to the EBA by clicking on the “send your comments” button on the consultation page.

All contributions received will be published after the consultation closes, unless requested otherwise. The deadline for the submission of comments is 16 June 2025.

A public hearing on this consultation will take place on 13 May 2025 from 10:00 to 12:00 CEST. Deadline for registration is 9 May 2025 at 16:00 CEST.

Legal basis and background

The EBA has developed these draft RTS under Article 59(9 of CSDR, which mandates the Authority to help support further settlement in foreign currencies by CSDs while still ensuring a level playing field in the industry. In particular, the EBA is mandated to set out a threshold at which CSDs providing ‘banking-type ancillary services’ need to meet certain prudential risk management requirements.

Banking-type ancillary services include activities such as providing cash accounts to, and accepting deposits from, participants in a securities settlement system, and payment services involving processing of cash and foreign exchange transactions. 

Source: Government of the Netherlands

News item | 12-03-2025 | 09:00

Semiconductors are the backbone of our society and our economies, powering everything innovative from artificial intelligence, aerospace, defense, mobility, communications to energy. Strengthening Europe’s position in this strategic sector is not just an economic priority, but also a strategic necessity for prosperity and security, according to the nine involved countries. Better cooperation enhances technological sovereignty, resilience and strategic autonomy of the EU. The Semicon Coalition will work together with the European Commission who was in attendance during the launch today.

Minister Dirk Beljaarts of Economic Affairs of The Netherlands: “The ministers of the nine involved countries all agree that Europe’s governments, industry and knowledge institutes need to align their efforts. The EU must strongly enhance its cooperation. For the very first time we have agreed to coordinate a joint approach for the semiconductor industry. Which includes a common strategy to increase production capacity, invest in cutting-edge research and develop a skilled workforce throughout Europe.”

Objectives of the Semicon Coalition are expanding production capacity within the EU and further strengthening Europe’s current key leading positions within the global semiconductor value chain. The initiative is also responding to an ongoing global increase in public investments within this industry. At present, a joint financing of €43 billion is available for the European semiconductor industry through the EU Chips Act. Other large public multibillion investments are the CHIPS & Science Act in the US, The Big Fund in China and several substantial initiatives in South Korea, Taiwan and Japan. Together with the European Commission the new Semicon Coalition will explore support possibilities within Europe for the long term.

The common statement on the establishment of the Semicon Coalition can be read here.

Source: European Banking Authority

The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today issued an Opinion on the European Commission’s (EC) rejection of the draft Regulatory Technical Standard (RTS) on subcontracting.

The EC rejected the original draft RTS on subcontracting, which specified further elements that financial entities must determine and assess when subcontracting ICT services that support critical or important functions under the Digital Operational Resilience Act (DORA), on the grounds that certain elements exceeded the powers given to the ESAs by DORA.

Today’s Opinion acknowledges the assessment performed by the EC and confirms that the amendments proposed ensure that the draft RTS is in line with the mandate set out under DORA. For this reason, the ESAs do not recommend further amendments to the RTS in addition to the ones proposed by the EC.

The ESAs encourage the EC to finalise the adoption of the RTS without further delay as submitted to the ESAs.

Legal basis

Article 30(5) of DORA mandates the ESAs to develop draft regulatory technical standards specifying the elements that a financial entity must determine and assess when subcontracting ICT services supporting critical or important functions. The ESAs submitted to the EC their original RTS on 17 July 2024. On 21 January 2025 and in accordance with Article 15(1) of the ESAs Regulations, the EC notified the ESAs that it rejected the draft RTS. Pursuant to Article 10(1) of the ESAs Regulations, the ESAs prepared this Opinion on the proposed amendments to the draft RTS by the EC.

Source: European Banking Authority

The European Banking Authority (EBA) launched today a public consultation on four draft Regulatory Technical Standards (RTS) that will be part of the EBA’s response to the European Commission’s Call for Advice.  These technical standards will be central to the EU’s new AML/CFT regime and will shape how institutions and supervisors will comply with their AML/CFT obligations under the new AML/CFT package. The consultation runs until 6 June 2025.

The proposed RTSs focus on the following aspects for which the EBA is providing its advice:

• he way the new EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will decide which institutions will be subject to the direct supervision. The EBA is proposing that AMLA first determines which institutions are eligible for direct supervision taking into account their cross-border activities. In a second step, AMLA would consider the outcomes of the harmonised money-laundering/terrorist financing (ML/TF) risk assessment methodology.
• the determination of the ML/TF risk associated with each institution. The EBA is proposing to put in place a harmonised methodology that all national supervisors will apply when assessing an institution’s inherent risks, the quality of controls and the residual risks that remain after the controls have been applied. The proposed approach will ensure that supervisors’ entity-level risk assessments are consistent with comparable outcomes across Member States. It would also reduce regulatory burden for cross-border institutions, especially because different supervisors’ information requests would be aligned.
• the extent and quality of information institutions will have to obtain as part of the customer due diligence process under the new AML/CFT regime. To achieve effective outcomes, and to limit the cost of compliance, the EBA is proposing a framework within which institutions can choose the most appropriate approach to the extent that it is in compliance with the new AML Regulation. For example, the EBA lists the types of documents and sources of information that institutions should consult, rather than specify the documents and sources themselves.
• on indicators  and criteria to be taken into account when setting the level of pecuniary sanctions or taking administrative measures including developing a methodology on how to impose  periodic penalty payments. The aim is to ensure that AML/CFT breaches are assessed in the same way by all supervisors across the EU and that the enforcement action is proportionate, dissuasive and effective.

The European Commission has asked the EBA to prepare the above-mentioned technical standards to support the rapid and effective start of AMLA operations. The EBA will submit its response with the above-mentioned technical standards to the European Commission on 31 October 2025.

Consultation process

Comments to the consultation paper can be sent by clicking on the “send your comments” on the EBA’s consultation page. The deadline for the submission of comments is 6 June 2025. The EBA will consider the feedback received to this consultation when finalising the response to the European Commission’s Call for advice.

All contributions received will be published following the end of the consultation, unless requested otherwise.

The EBA will hold a virtual public hearing on the consultation paper on 10 April 2025 from 14:00 CET. The EBA invites interested stakeholders to register using this link by 8 April 2025 at 16:00 CET. The dial-in details will be communicated to those who have registered for the meeting.

Legal basis and background

The EBA’s work on these RTS stems from the European Commission’s Call for Advice of 12 March 2024. The latter relates to the preparation of four regulatory mandates under Article 40(2) of Directive (EU) 2024/1640 (AMLD6), Article 12(7) of Regulation (EU) 2024/1620 (AMLAR), Article 28(1) of Regulation (EU) 2024/1624 (AMLR) and Article 53(10) of AMLD6.

These mandates are part of the new AML/CFT package that was published in the Official Journal of the EU on 19 June 2024. The package, which consists of four legal texts, will transform how the fight of money laundering and terrorist financing is organised in the EU. It creates a new agency that will directly supervise several financial institutions in the EU, harmonises the approaches of national AML/CFT supervisors and financial intelligence units within the EU and introduces for the first time a Single AML/CFT Rulebook.