EBA speech on efficiency and effectiveness of EU Financial Regulation

The European Banking Authority (EBA) has published a keynote speech delivered by its Chairperson, José Manuel Campa, at a high-level meeting for European supervisors in Ljubljana, Slovenia, on the importance of an efficient and effective financial services regulatory framework to support sustainable growth while enhancing EU competitiveness. While acknowledging the effectiveness of the current framework, particularly in ensuring financial stability, Mr Campa recognises concerns around its complexity and proportionality, understanding the need for greater simplification efforts.

He outlines four key areas in which the EBA sees room for improvement:

• How its regulatory products are developed, including regulatory technical standards, implementing technical standards, guidelines, and Q&As. The EBA aims to (i) review whether existing level 2 and level 3 regulation remain fit for purpose and can be implemented by institutions that are subject to these standards in a simple and efficient manner; (ii) streamline and simplify rules where possible (e.g. on remuneration); (iii) better assess the impact of each mandate for stakeholders and prioritise mandates based on their impact and urgency; and (iv) contribute to the EU co-legislator' ongoing review of level 2 mandates to improve the efficiency of the EU Single Rulebook.
• Reducing the reporting burden, by ensuring data requests are risk-based, relevant and fit for purpose. The EBA also seeks to enhance proportionality and reduce duplications and ad-hoc requests through closer coordination with supervisory and other competent authorities.
• Strengthening supervisory convergence, by reviewing all available tools, such as peer and thematic reviews, with the objective of using them to their full potential and with the right objective.
• Promoting regulatory coherence. The EBA seeks to share its views on how prudential regulation interacts with other EU financial rules, although acknowledging this may extend beyond its direct remit. It sees value in contributing to the EC's upcoming report on the effectiveness of the Banking Union, as part of its effort to assess whether current rules are well-aligned with its objectives.

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