EBA Regulatory Framework

EBA Regulatory Framework

The European Banking Authority (EBA) is an EU agency that works to ensure effective and consistent prudential regulation across the European banking sector.

EBA Mandate

Core Objectives

1. Maintain financial stability in the EU
2. Ensure integrity, efficiency and orderly functioning of banking sector
3. Protect consumers and depositors
4. Supervisory convergence across member states

Regulatory Products

Binding Technical Standards (BTS)

• Regulatory Technical Standards (RTS) - Detailed rules
• Implementing Technical Standards (ITS) - Uniform conditions for application

Guidelines

• Non-binding but "comply or explain"
• Supervisory convergence
• Best practices

Recommendations

• Addressed to competent authorities
• Specific supervisory issues

Key EBA Guidelines

Governance

• EBA/GL/2021/05: Internal governance
• Board composition and duties
• Risk culture requirements

Risk Management

• EBA/GL/2020/06: Loan origination and monitoring
• Credit risk management
• Affordability assessments

ICT and Security

• EBA/GL/2019/04: ICT and security risk management
• Incident reporting
• Business continuity

Outsourcing

• EBA/GL/2019/02: Outsourcing arrangements
• Cloud services
• Third-party risk

ESG

• EBA/GL/2020/06: ESG disclosures
• Climate risk management
• Sustainability reporting

Single Rulebook

Capital Requirements Regulation (CRR)

• Directly applicable
• Capital, liquidity, leverage
• Large exposures, reporting

Capital Requirements Directive (CRD)

• Implemented nationally
• Governance, remuneration
• Supervisory powers

Supervisory Review and Evaluation Process (SREP)

Assessment Elements

1. Business model analysis
2. Internal governance and controls
3. Risks to capital
4. Risks to liquidity and funding

SREP Scores

• Score 1: No discernible risk
• Score 2: Low risk
• Score 3: Medium risk
• Score 4: High risk

EU-Wide Stress Tests

• Biennial exercises
• Coordinated with ECB and national authorities
• Published results for transparency