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European Banking Authority (EBA)

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European Banking Authority (EBA)

The 2008 financial crisis brought to light shortcomings in European financial supervision. Based in London, the European Banking Authority (EBA) was created in 2010 to safeguard the stability and resilience of the European banking system.

ACT

Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC.

SUMMARY

The 2008 financial crisis brought to light shortcomings in European financial supervision. Based in London, the European Banking Authority (EBA) was created in 2010 to safeguard the stability and resilience of the European banking system.

WHAT DOES THIS REGULATION DO?

The EBA was set up via a regulation in order to strengthen coordination among national banking supervisors and ensure the consistent application of EU banking legislation.

KEY POINTS

Consistent application of law

The EBA draws up regulatory and technical standards to specify the banking legislation adopted by the Council and the European Parliament. It also has the power to issue guidelines and recommendations on the application of European legislation.

Stress tests

The EBA is in charge of coordinating with the national authorities responsible for supervising banks the conduct of ‘stress tests’ to assess banks' resilience to financial shocks. In particular, it is meant to ensure that a consistent methodology is applied at national level for the conduct of these tests. It also monitors and assesses market and credit trends.

Breach of laws

The EBA has the power to investigate the alleged incorrect application by a national supervisor of European banking and financial legislation (in particular, when it fails to ensure that a bank complies with the requirements laid down in the legislation).

The EBA may address a recommendation to the particular national supervisor. If it does not comply with this, the Commission can then be empowered to issue a formal opinion taking into account the EBA’s recommendation.

If a national supervisor persists in its non-compliance with the law, the EBA can adopt decisions directly addressed to the bank. This power can only be used in exceptional circumstances.

European financial supervision

The EBA is part of the European System of Financial Supervision created in 2010, and which comprises 3 other supervisory organisations:

The supervisory authority in charge of the insurance and pension sector, based in Frankfurt (European Insurance and Occupational Pensions Authority - EIOPA).

The supervisory authority in charge of the financial markets, based in Paris (European Securities and Markets Authority - ESMA).

The European Systemic Risk Board (ESRB) responsible for the overall oversight of the financial stability in the EU, based in Frankfurt.

WHEN DOES THIS REGULATION APPLY?

From 16 December 2010.

For more information, see the EBA's website.

REFERENCES

Act

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EU) No 1093/2010

16.12.2010

-

OJ L 331 of 15.12.2010, pp. 12-47

Amending acts

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EU) No 1022/2013

30.10.2013

-

OJ L 287 of 29.10.2013, pp. 5-14

Directive 2014/17/EU

20.03.2014

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OJ L 60 of 28.2.2014, pp. 34-85

RELATED ACTS

Council Regulation (EU) No 1096/2010 of 17 November 2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board (OJ L 331 of 15.12.2010, pp. 162-164).

Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 98/26/EC, 2002/87/EC, 2003/6/EC, 2003/41/EC, 2003/71/EC, 2004/39/EC, 2004/109/EC, 2005/60/EC, 2006/48/EC, 2006/49/EC and 2009/65/EC in respect of the powers of the European Supervisory Authority (European Banking Authority), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) (OJ L 331 of 15.12.2010, pp. 120-161).

Last updated: 20.03.2015

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