European Banking Authority (EBA)

 

SUMMARY OF:

Regulation (EU) No 1093/2010 establishing the European Banking Authority

WHAT IS THE AIM OF THE REGULATION?

• It sets up the European Banking Authority (EBA), a European Union (EU) agency that works to ensure effective and consistent prudential regulation and supervision across the European banking sector.
• The EBA’s overall objectives are to maintain financial stability in the EU and to safeguard the integrity, efficiency and orderly functioning of the banking sector.

KEY POINTS

Consistent application of EU law

The EBA:

• draws up regulatory technical standards to specify the banking legislation to be adopted by the European Commission, where the European Parliament and the Council of the European Union delegate this power to the Commission;
• has the power to issue guidelines and recommendations on the application of the relevant EU legislation and, under amending Regulation (EU) 2019/2175, is granted more wide-ranging powers in relation to money laundering-related breaches.

Stress tests

The EBA has a prominent role in the EU-wide stress test exercise that examines banks’ resilience with regard to adverse market developments and any systemic risks in the EU financial system.

• It initiates and coordinates stress tests in the EU with the national authorities responsible for supervising banks.
• In cooperation with the European Systemic Risk Board (ESRB), the European Central Bank and the Commission, the EBA defines a common methodology for each edition of the stress test.
• It also monitors and assesses market and credit trends.

Breaches of EU law

• The EBA has the power to investigate the alleged incorrect application by a national supervisor of EU banking and financial legislation (in particular when it fails to ensure that a bank complies with the requirements laid down in that legislation).
• The EBA may address a recommendation to the particular national supervisor. If the supervisor does not comply with this, the Commission can issue a formal opinion taking into account the EBA’s recommendation.
• If a national supervisor persists in not complying with the law, the EBA can adopt decisions directly addressed to the bank. This power can only be used in exceptional circumstances.
• Amending Regulation (EU) 2019/2175 gives the EBA power to take immediate action where anti-money laundering rules are broken at the national level (see below).

European financial supervision

The EBA is part of the European system of financial supervision created in 2010 which, in addition to the ESRB, comprises two other supervisory organisations:

• the European Insurance and Occupational Pensions Authority
• the European Securities and Markets Authority.

Amending Regulation (EU) 2019/2175 bolsters the mandates, governance and funding of the three European supervisory authorities and, in regard to the EBA, it:

• reinforces its supervisory role and powers with a view to combating money laundering and terrorist financing and, in this regard, requires it to:
  • collect information from the competent national authorities,
  • develop new standards to improve the quality of supervision,
  • carry out risk assessments,
  • facilitate cooperation with non-EU countries on cross-border cases;
• strengthens its powers in the area of consumer protection by promoting greater transparency and clarity regarding financial products and services by:
  • monitoring trends in retail financial products’ costs and charges,
  • developing retail risk indicators for consumers;
• increases its resources to enable it to carry out its new tasks.

Payment services

In relation to payments services in the EU, amending Directive (EU) 2015/2366 strengthens the EBA’s role (see summary) and requires it to:

• develop a publicly accessible central register of authorised payment institutions, which must be kept up to date by the national authorities;
• assist in resolving disputes between national authorities;
• develop and issue guidelines and draft regulatory technical standards on:
  • strong customer authentication and secure communication channels with which all payment service providers must comply,
  • cooperation and the exchange of information between supervisory authorities.

Headquarters

Under amending Regulation (EU) 2018/1717, in the context of the United Kingdom’s withdrawal from the EU, the seat of the EBA was relocated from London to Paris as of 30 March 2019.

FROM WHEN DOES THE REGULATION APPLY?

• Regulation (EU) No 1093/2010 has applied since 1 January 2011.
• Amending Directive (EU) 2015/2366 has applied since 12 January 2016 and had to become law in the Member States by 13 January 2018.
• Amending Regulation (EU) 2019/2175 has applied since 1 January 2020.

BACKGROUND

For further information, see:

• Missions and tasks (European Banking Authority)
• Supervisory convergence (European Banking Authority).

MAIN DOCUMENT

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 (OJ L 331, 15.12.2010, pp. 12–47).

Successive amendments to Regulation (EU) No 1093/2010 have been incorporated into the original document. This consolidated version is of documentary value only.

RELATED DOCUMENTS

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, pp. 349–496).

See consolidated version.

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, 15.12.2010, pp. 162–164).

last update 29.11.2021