EBA 2021 Annual Work Programme.pdf

Mission Statement: The EBA aims to ensure stability, integrity, and efficiency in the EU banking system through effective supervision, risk management, and regulatory harmonization.

Strategic Priorities:

The EBA has identified six key areas of focus:

1. Implementing Risk Reduction Measures: Promoting deployment of existing tools and developing new ones to mitigate financial risks.
2. Enhancing EU-Wide Stress Testing: Reviewing and updating the framework for stress testing banks across the EU for greater effectiveness.
3. Establishing a Data Hub: Leveraging enhanced technical capabilities to analyze data flexibly and comprehensively, supporting informed decision-making.
4. Driving Financial Innovation and Resilience: Fostering a sound development environment for financial innovation while ensuring operational resilience.
5. Strengthening AML/CFT Supervision: Building infrastructure within the EU to lead, coordinate, and monitor Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) supervision.
6. Integrating ESG Risks: Establishing policies for factoring in and managing Environmental, Social, and Governance (ESG) risks within financial institutions.

Horizontal Priorities:

In addition to these strategic priorities, the EBA will focus on:

Promoting Good Governance: Encouraging sound governance practices and ethical conduct within financial institutions.
Addressing COVID-19 Impacts: Providing support and guidance to banks affected by the pandemic.

Detailed Activities:

The work programme outlines 37 specific activities across various aspects of banking supervision, including:

Capital Adequacy Assessment: Ensuring banks maintain sufficient capital to absorb losses.
Liquidity Risk Management: Monitoring and managing banks' liquidity positions.
Leverage Ratio Oversight: Evaluating banks' leverage ratios for stability.
Loss Absorbency Analysis: Assessing banks' ability to absorb losses during distress scenarios.
Accounting and Audit Standards: Promoting transparent and consistent financial reporting.
Supervisory Review: Conducting comprehensive reviews of national competent authorities (NCAs).
Internal Governance and Remuneration: Encouraging robust internal controls and ethical remuneration practices.
Recovery and Resolution Planning: Ensuring banks have effective plans in place for resolution in case of failure.
Market Risk Management: Monitoring and controlling market risk exposures.
Operational Risk Assessment: Identifying, assessing, and mitigating operational risks within banks.
Consumer Protection: Safeguarding consumer rights and interests in financial services.
Anti-Money Laundering and CFT: Strengthening measures to prevent and combat AML/CFT activities.
* Data Analysis and Infrastructure Development: Building a robust EU data hub for supervisory purposes.

Resource Allocation: The document includes a detailed breakdown of resource allocation per activity.