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Supervision of financial conglomerates



Directive 2002/87/EC on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate


  • It seeks to enhance the effective supervision of financial conglomerates — large financial groups which are active in different financial sectors (banking/investment services and insurance), often across borders.
  • Its overall aim is to contribute to greater financial stability and consumer protection.


The directive sets out specific requirements:

  • on solvency, with an overall requirement integrating all of the sectoral solvency requirements to which the group is subject, also to prevent the same capital being used more than once as a buffer against risk in different entities in the same conglomerate (‘multiple gearing of capital’) and to prevent ‘downstreaming’ by parent companies, whereby they issue debt and then use the proceeds as equity for their regulated subsidiaries (‘excessive leveraging’);
  • on the suitability and professionalism of the conglomerate’s management;
  • to ensure appropriate risk management and internal control systems within the conglomerate;
  • stipulating that a single supervisory authority should be appointed to coordinate the overall supervision of a conglomerate, which may involve many different authorities dealing with different parts of the conglomerate’s activities;
  • for information sharing and cooperation among the supervisors (including those in non-EU countries) of the regulated entities in a financial conglomerate.

Amendments to Directive 2002/87/EC

  • Directive 2011/89/EU introduced amendments giving national financial supervisors new powers to better oversee conglomerates’ parent entities, such as holding companies. In this way, should a financial conglomerate run into trouble, supervisors may obtain better information at an earlier stage and be better equipped to intervene.
  • Directive 2013/36/EU on prudential supervision of banks and investment firms introduced amendments to allow for technical standards to be developed so that institutions that are part of a financial conglomerate apply the appropriate calculation methods for the determination of required capital on a consolidated basis (see summary).
  • Directive (EU) 2019/2034 established a specific prudential framework for investment firms which, until this directive, had been subject to the same rules as banks (see summary).


Directive 2002/87/EC has applied since 11 February 2003 and had to become law in the Member States by 10 August 2004.


For more information, see:


Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, pp. 1–27).

Successive amendments to Directive 2002/87/EC have been incorporated in the original text. This consolidated version is of documentary value only.

last update 12.11.2021