The European Banking Authority (EBA) is a regulatory
agency of the European Union
The agencies of the European Union (formally: ''Agencies, decentralised independent bodies, corporate bodies and joint undertakings of the European Union and the Euratom'') are bodies of the European Union and the Euratom established as juridica ...
headquartered in
Paris
Paris () is the capital and most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), making it the 30th most densely populated city in the world in 2020. S ...
. Its activities include conducting
stress tests on European banks to increase transparency in the European financial system and identifying weaknesses in banks' capital structures.
The EBA has the power to overrule national regulators if they fail to properly regulate their banks. The EBA is able to prevent regulatory arbitrage and should allow banks to compete fairly throughout the EU. The EBA will prevent a race to the bottom because banks established in jurisdictions with less regulation will no longer be at a competitive advantage compared to banks based in jurisdictions with more regulations as all banks will henceforth have to comply with the higher pan European standard.
History
The EBA was established on 1 January 2011, upon which date it inherited all of the tasks and responsibilities of the
Committee of European Banking Supervisors
The Committee of European Banking Supervisors (CEBS) was an independent advisory group on banking supervision in the European Union (EU). Established by the European Commission in 2004 by Decision 2004/5/EC, and its charter revised on 23 January ...
(CEBS). In continuity with the CEBS secretariat and until 30th March 2019 it was located in
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
.
As a consequence of
the United Kingdom's planned withdrawal from the EU, the European Commission worked on plans to move the EBA (alongside the
European Medicines Agency
The European Medicines Agency (EMA) is an agency of the European Union (EU) in charge of the evaluation and supervision of medicinal products. Prior to 2004, it was known as the European Agency for the Evaluation of Medicinal Products or Euro ...
) out of the United Kingdom, to keep it inside the remaining EU member states. Future homes considered for the agency were
Brussels
Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...
,
Dublin
Dublin (; , or ) is the capital and largest city of Republic of Ireland, Ireland. On a bay at the mouth of the River Liffey, it is in the Provinces of Ireland, province of Leinster, bordered on the south by the Dublin Mountains, a part of th ...
,
Frankfurt
Frankfurt, officially Frankfurt am Main (; Hessian: , "Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on its na ...
,
Luxembourg
Luxembourg ( ; lb, Lëtzebuerg ; french: link=no, Luxembourg; german: link=no, Luxemburg), officially the Grand Duchy of Luxembourg, ; french: link=no, Grand-Duché de Luxembourg ; german: link=no, Großherzogtum Luxemburg is a small lan ...
,
Paris
Paris () is the capital and most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), making it the 30th most densely populated city in the world in 2020. S ...
,
Prague
Prague ( ; cs, Praha ; german: Prag, ; la, Praga) is the capital and largest city in the Czech Republic, and the historical capital of Bohemia. On the Vltava river, Prague is home to about 1.3 million people. The city has a temperate ...
,
Vienna
en, Viennese
, iso_code = AT-9
, registration_plate = W
, postal_code_type = Postal code
, postal_code =
, timezone = CET
, utc_offset = +1
, timezone_DST ...
and
Warsaw
Warsaw ( pl, Warszawa, ), officially the Capital City of Warsaw,, abbreviation: ''m.st. Warszawa'' is the capital and largest city of Poland. The metropolis stands on the River Vistula in east-central Poland, and its population is officia ...
. In the end, Paris was selected by drawing of lots to house the EBA, at 18:40
CET
CET or cet may refer to:
Places
* Cet, Albania
* Cet, standard astronomical abbreviation for the constellation Cetus
* Colchester Town railway station (National Rail code CET), in Colchester, England
Arts, entertainment, and media
* Comcast En ...
on Monday, 20 November 2017.
In June 2021, the EBA said that banks in the European Union must have a ten-year plan that explains how they will deal with environmental, social, and government (
ESG ESG may refer to :
Groups
* Election Support Group, an internationally sponsored organization analyzing and supporting the electoral process in Pakistan
* ES Guelma, an Algerian football club based in Guelma
* Escuela Superior de Guerra (Argenti ...
) risks to their bottom line.
Mission and tasks
The main task of the EBA is to contribute, through the adoption of binding Technical Standards (BTS) and Guidelines, to the creation of the European Single Rulebook in banking. The
Single Rulebook
The banking union of the European Union is the transfer of responsibility for banking policy from the national to the EU level in several EU member states, initiated in 2012 as a response to the Eurozone crisis. The motivation for banking union w ...
aims at providing a single set of harmonised prudential rules for financial institutions throughout the EU, helping create a level playing field and providing high protection to depositors, investors and consumers.
The Authority also plays an important role in promoting convergence of supervisory practices to ensure a harmonised application of prudential rules. Finally, the EBA is mandated to assess risks and vulnerabilities in the EU banking sector through, in particular, regular risk assessment reports and
pan-European stress tests.
Other tasks set out in the EBA's mandate include:
* investigating alleged incorrect or insufficient application of EU law by national authorities
* taking decisions directed at individual competent authorities or financial institutions in emergency situations
* mediating to resolve disagreements between competent authorities in cross-border situations
* acting as an independent advisory body to the European Parliament, the Council or the Commission.
* taking a leading role in promoting transparency, simplicity and fairness in the market for consumer financial products or services across the internal market.
To perform these tasks, the EBA can produce a number of regulatory and non regulatory documents including binding Technical Standards, Guidelines, Recommendations, Opinions, Questions and Answers (Q&As) and ad-hoc or regular reports. The Binding Technical Standards are legal acts which specify particular aspects of an EU legislative text (Directive or Regulation) and aim at ensuring consistent harmonisation in specific areas. The EBA develops draft BTS which are finally endorsed and adopted by the European Commission. Contrary to other documents such as Guidelines or Recommendations, the BTS are legally binding and directly applicable in all Member States.
Common Reporting Framework
Common Reporting (COREP) is the standardised reporting framework issued by the EBA for the
Capital Requirements Directive
The Capital Requirements Directives (CRD) for the financial services industry have introduced a supervisory framework in the European Union which reflects the Basel II and Basel III rules on capital measurement and capital standards.
Member St ...
reporting. It covers
credit risk
A credit risk is risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased ...
,
market risk
Market risk is the risk of losses in positions arising from movements in market variables like prices and volatility.
There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the most ...
,
operational risk, own fund and
capital adequacy ratio Capital Adequacy Ratio (CAR) is also known as ''Capital to Risk (Weighted) Assets Ratio'' (CRAR), is the ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss and co ...
s. This reporting framework has been adopted by almost 30 European countries. Regulated institutions are periodically required to file COREP reports, on both a solo and consolidated basis using
XBRL
XBRL (eXtensible Business Reporting Language) is a freely available and global framework for exchanging business information. XBRL allows the expression of semantic meaning commonly required in business reporting. The language is XML-based an ...
in Eurofiling
architecture taxonomies. All regulated organisations in the UK must use COREP to make their regular statutory reports from 1 January 2014 onwards.
Leadership
Chair:
*
José Manuel Campa (since 1 May 2019)
*
Andrea Enria
Andrea Enria (born 3 July 1961) an Italian economist who currently serves as Chair of the European Central Bank's Supervisory Board, as of 1 January 2019. He previously served as the chairperson of the European Banking Authority (EBA) between 2011 ...
(1 January 2011 - 31 December 2018)
Executive Director:
* François-Louis Michaud (since 1 September 2020)
* Peter Mihalik (acting, 2020)
* (2011-2020)
See also
*
European Central Bank
The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's Big Four (banking)#Intern ...
(
Single Supervisory Mechanism
The Single Supervisory Mechanism (SSM) is the first pillar of the European banking union and is the legislative and institutional framework that grants the European Central Bank (ECB) a leading supervisory role over banks in the EU. The ECB d ...
)
*
European Insurance and Occupational Pensions Authority
The European Insurance and Occupational Pensions Authority (EIOPA) is a European Union financial regulatory institution that replaced the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). It is established under EU Re ...
*
European Medicines Agency
The European Medicines Agency (EMA) is an agency of the European Union (EU) in charge of the evaluation and supervision of medicinal products. Prior to 2004, it was known as the European Agency for the Evaluation of Medicinal Products or Euro ...
*
European Securities and Markets Authority
The European Securities and Markets Authority (ESMA) is an independent European Union Authority located in Paris.
ESMA replaced the Committee of European Securities Regulators (CESR) on 1 January 2011. It is one of the three new European Supe ...
*
European System of Financial Supervision
The European System of Financial Supervision (ESFS) is the framework for financial supervision in the European Union that has been in operation since 2011. The system consists of the ''European Supervisory Authorities'' (ESAs), the European Syst ...
*
European Systemic Risk Board
The European Systemic Risk Board () is a group established on 16 December 2010 in response to the ongoing financial crisis. It is tasked with the macro-prudential oversight of the financial system within the European Union in order to contrib ...
*
List of acronyms: European sovereign-debt crisis
References
External links
*
Regulation (EU) No 1093/2010Larosière reportEuroFiling initiative: XBRL taxonomies for COREP and FINREP regulatory frameworks
{{Authority control
2011 in the European Union
Agencies of the European Union
Banking in the European Union
La Défense
European Union financial market policy
Financial regulatory authorities
Government agencies established in 2011
International organizations based in France