The European Commission (EC) and the European Banking Authority (EBA) have published their work plans for 2018. The documents describe the specific activities and tasks the organizations plan to carry out next year. Both proposals place increasing importance on the fintech sector, since it could bring about a radical change the financial industry.
The European Commission’s program includes 26 new legislative initiatives and has the twofold objective of finalizing EU work on priority political areas and presenting ambitious initiatives with an eye toward the future.
The EC plans to take measures to boost employment, growth and investment. To this end, the Commission will continue to take steps to follow the action plan for a circular economy and to finalize the Digital Single Market, the Energy Union, the Capital Markets Union, the Economic and Monetary Union and the Banking Union.
Some of the proposals to complete the Banking Union include developing secondary markets for non-performing loans and adopting measures to enhance the protection of guaranteed creditors.
In order to complete the Capital Markets Union, the European Commission is proposing a revised framework for investment companies, an action plan for sustainable finance, fintech initiatives and a European framework for covered bonds.
Meanwhile, the EBA’s 2018 work plan will mainly focus on: (i) developing the CRR/CRD and BRRD Directives, (ii) building the infrastructure and data analysis needed to improve the institution’s role as a data hub for EU banks; (iii) monitoring and assessing the impact of the United Kingdom´s decision to leave the EU, to protect the public interest; (iv) evaluating and contributing to fintech regulation; (v) promoting proportionality in the implementation of its policies; and (vi) contributing to the European Council’s action plan to address non-performing loans in Europe.
From 2018 to 2021, the EBA will also adjust its strategic focus regarding the EU single market and its role in the Banking Union. It has set the following three priorities in these areas.
- Create an agenda that allows for the convergence of supervisory and resolution practices: The EBA aims to develop new tools (such as the comparative assessment of the results of supervision), remodeling those that already exist (such as stress tests and examiner training); and putting greater emphasis on political issues, such as formulas to address misconduct or cyberattacks.
- Review the impact of regulatory reforms on banking markets through reinforced analytical capacities: The EBA wants to have a clear vision of the impact of the new regulations in order to be able to minimize the regulatory burden on the finance sector. Its analysis will also focus on the complexity of the new framework and the appropriate application of the principle of proportionality, which will be crucial to upholding the rules and technical guidelines.
- Progress in the development of financial innovation policies: digital banking will be a challenge for supervisors over the coming years, and the EBA must ensure that users are appropriately protected. Other goals include establishing which firms are, or should be, formally regulated; and determining the fintech-related risks and opportunities for traditional financial institutions. The EBA also aims to assess the utility of financial technology in initiatives to prevent money laundering and financing of terrorism.