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The European Banking Authority (EBA) published today a Decision specifying the formula to be used by creditors when calculating the benchmark rate under the Mortgage Credit Directive (MCD). The MCD requires creditors to use, under certain circumstances, a benchmark rate specified by the EBA for the illustrative examples in the European Standardised Information Sheet (ESIS) for variable rate mortgages. The EBA formula will apply 20 days after its publication in the EU Official Journal but can also be used by creditors prior to its formal publication.

MiFID II mandated European Securities and Markets Authority (ESMA), in cooperation with the European Banking Authority (EBA) and European Insurance and Occupational Pensions Authority (EIOPA), to develop Guidelines for the assessment and the supervision of cross-selling practices. In order to take into account the cross-sectoral implications of this mandate, the three European Supervisory Authorities (ESAs) published the draft Guidelines under the auspices of the Joint Committee, and did so by widening the scope such that they consistently cover cross-selling practices in all three sectors. Following the joint consultation, several concerns were raised as to the ESAs’ ability to address cross-selling in a way that is compatible with related provisions in other Level 1 legislation, such as the Mortgage Credit Directive and the Payment Accounts Directive. Therefore, the Joint Committee decided not to issue final joint Guidelines, and for ESMA instead to issue its ESMA-only Guidelines covering only the investment sector. In addition, the three ESAs sent a letter to the European Commission asking the co-legislator to address the differences in the existing legislation and to ensure that the ESAs can regulate cross-selling practices in a consistent way across the three sectors, for the benefit of consumers, financial institutions, and supervisory authorities.

The Chairpersons of the three European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – sent a joint letter on cross-selling of financial products to Jonathan Hill, the European Commissioner for Financial Stability, Financial Services and Capital Markets Union.

The European Banking Authority (EBA) launched today a consultation on its draft guidelines on remuneration policies and practices related to the sale and provision of retail banking products and services. The EBA has identified poor remuneration policies and practices as a key driver of miss-selling of financial products and services. The Guidelines are aimed at protecting consumers and reducing conduct costs of firms. The consultation runs until 22 March 2016.