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Welcome to Banking News, the KPMG Ireland Quarterly Banking Newsletter, which has been designed to bring together useful insights and developments that are relevant to the banking industry.

We hope you find the articles below of interest. If you would like further information on any topic or have any questions, please feel free to contact any member of the KPMG Banking team.

New Reality

KPMG has investigated how companies can utilise the COVID-19 crisis to shape their culture in the future in the “Consensus Culture Creation: Seizing new ways of working” report.

In the Capital markets sector the “Ensuring Stable Capital Markets” paper looks at how regulators are reviewing the financial market disruption caused by the pandemic, the immediate steps they took to mitigate the impacts and the areas of focus going forward.

The Central Bank of Ireland (CBI) has published a statement on the European Banking Authorities (EBA) decision to reactivate its guidelines on payment moratoria.

The EBA’s decision means that, for a limited period, where national payment moratoria meet the conditions of the EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis, banks granting such payment breaks to customers do not have to automatically reclassify exposures as forborne or defaulted.

The CBI has also assessed where COVID-19 flexibility measures for credit institutions could apply to aspects of the regulatory framework under its remit. 

For more information on how KPMG can help, please visit our Risk Consulting homepage.

Financial and Operational Resilience

With one of the stated aims of the EBA Work Programme 2021 being “contributing to the sound development of financial innovation and operational resilience in the financial sector”, and the Central Bank of Ireland (CBI) publishing a forward-looking assessment document of banking resilience in the Financial Stability Review 2020, financial and operational resilience must be at the forefront of banking executive's minds in 2021.

A summary of the current state of play for financial and operational resilience can be found in the October edition of Horizons magazine where an article titled “Financial and Operational Resilience for banks” provides a summary of the current environment. 

KPMG Ireland has also produced “Financial resilience in banking” which looks at financial resilience in the banking sector from a regulatory and industry perspective.

For more information on how KPMG can help, please contact Ian Nelson

Sustainable Finance

In November 2020, the EBA launched a consultation supported by a discussion paper on “Management and supervision of ESG risks for credit institutions and investment firms” which looks at the incorporation of ESG risks into the governance, risk management and supervision of credit institutions and investment firms.

This was followed by the publication of the ECB’s “Guide on climate-related and environmental risks” which set out the supervisory expectations relating to risk management and disclosure.

KPMG has produced an article titled “ESG Regulation: the race has begun”, which reflects on the place of sustainable finance in the regulatory mainstream, focusing on the first European Sustainable legislative package, the new European Green Deal, the impact on financial services firms, and ESG stress testing.

For more information on how KPMG can help, please contact Ian Nelson or visit our Sustainable Finance homepage.

Regulatory Updates

In 2020, the European Banking Authority (EBA) published draft consultation papers, resulting in the final publication in March 2020 of three RTSs related to Minimum capital requirements for market risk:

KPMG Global produced a paper titled “Minimum Capital Requirements for Market Risk” which sets out the differences in minimum capital requirements for the three finalised RTSs and what they mean for firms.

KPMG Ireland has published a piece of thought leadership on the area of “Addressing Vulnerability in Ireland” which speaks to how financial services companies should seek to establish a Vulnerable Customer Framework that will enable firms to identify actual or potential vulnerability characteristics and consider the treatment of vulnerable customers across their business.

The CBI has issued a “Dear CEO letter” setting out its expectations for firms to take appropriate action to address the significant issues identified by thematic inspections concerning their legal obligations under the Fitness and Probity (F&P) regime.

The EBA has published its annual “Risk Assessment of the European banking system” which provides detailed information, in a comparable and accessible format, for 129 banks across 26 EEA / EU countries and for 6 banks from the UK.

The EBA has published a report on the “Basel III Monitoring Exercise”, containing the results of the exercise it has carried out to monitor the impact of implementing the final Basel III reforms on EU banks' capital.

The EBA has published the final version of the methodological note for the “2021 EU-wide stress test”. The stress test aims to provide supervisors, banks and other market participants with an analytical framework to consistently compare and assess the resilience of EU banks and the EU banking system to shocks, and to challenge the capital position of EU banks.

The SRB has published its Work Programme 2021 and its multi-annual programme, covering the period 2021-23.

For more information on how KPMG can help with assessing the impact of regulatory developments please visit the regulatory consulting homepage

How can KPMG help?

KPMG has a large team of professionals with extensive knowledge and expertise in Financial Services, Banking, Aviation Finance, Insurance and Asset Management. KPMG Ireland can leverage a network of multidisciplinary professionals, stretching across Europe and beyond. Supported by this global network, KPMG Ireland can provide a broad range of support, advice and guidance on how to address the challenges you face.

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