Investment firms authorised under the Markets in Financial Instruments Directive (MiFID) provide a range of services and activities to investors in financial markets. These services are essential for the functioning of the financial markets and include, among others, the reception and transmission of orders, the provision of investment advice, discretionary portfolio management and trading on own account.The population of investment firms across the EU is diverse and firms vary greatly in […]
EU legislation requires that institutions have robust governance arrangements, including a clear organisational structure with well defined, transparent and consistent lines of responsibility, effective risk management processes, control mechanisms and gender neutral remuneration policies. The internal governance should be appropriate to the nature, scale and complexity of the institution. The main responsibility for internal governance lies with the management body, which is subject to […]
The EBA cooperates regularly and closely with the other two European Supervisory Authorities (ESAs), EIOPA and ESMA, through the ESAs' Joint Committee. The aim of this cooperation is to ensure cross-sectoral consistency of work and to reach joint positions in the area of supervision of financial conglomerates, under the Financial Conglomerates Directive (FICOD, 2002/87/EC). In this respect, the ESAs tasks include, in particular, contribution to the European Commission's fundamental review of […]
Credit risk focuses on the development of BTS, Guidelines and Reports regarding the calculation of capital requirements under the Standardised Approach and IRB Approach for credit risk and dilution risk in respect of all the business activities of an institution, excluding the trading book business. The objective is to provide a consistent implementation across the EU of the provisions related to topics such as credit risk adjustments, definition of default, permission to use Standardised/IRB […]
Enhanced cooperation between supervisory authorities both at EU and global level is key to strengthening the supervision of cross-border banking groups. Colleges of supervisors are the vehicles for the coordination of supervisory activities. Under EU law, colleges of supervisors have to be established for EEA banks with subsidiaries or significant branches in other EEA countries. They may include supervisors in non-EEA countries, where relevant. The colleges allow supervisory authorities to […]
The EBA coordinates financial education and literacy initiatives of national authorities, by identifying good practices and organizing workshops to promote them across national authorities, developing factsheets that provide tips for EU consumers in easy-to-understand language, and publishing warnings to make consumers aware of risks arising from specific products.
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The core aim of the large exposures regime is to act as a backstop to prevent an institution from incurring disproportionately large losses as a result of the failure of an individual client or group of connected clients due to the occurrence of unforeseen events. The objective of ensuring that risks arising from large exposures to individual clients or groups of connected clients are kept to an acceptable level is part of the overarching principles of prudential supervision, which are to […]
