The European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), the European Securities and Markets Authority (ESMA) and the European Commission have each set out their work programmes for 2022.

There are several consistent themes across the programmes, including continued management of the impacts of COVID-19, ESG and the sustainable finance agenda, enhancements to the supervisory framework, and supporting developments in innovation and digitisation.

EBA:

The EBA sets out five vertical priorities:

  • Monitoring and updating the prudential framework for supervision and resolution.
  • Revisiting and strengthening the EU-wide stress-testing framework.
  • Leveraging the European centralised infrastructure for supervisory data (EUCLID).
  • Deepening analysis and information-sharing in the areas of digital resilience, fintech and innovation.
  • Fighting AML/CFT and contributing to a new EU infrastructure.

And two horizontal priorities:

  • Providing tools to measure and manage ESG risks.
  • Monitoring and mitigating the impact of COVID-19.

The EBA also published:

  • The European Supervisory Examination Programme (ESEP), identifying key topics for supervisory attention and convergence. These topics closely align to the themes listed above - including COVID-19 impacts, ICT risk management, digital transformation, ESG risk and AML/CFT.
  • The European Resolution Examination Programme (EREP), identifying key topics for resolution authorities' attention. These topics include (i) managing MREL shortfalls, (ii) the development of management information systems for valuations in resolution and (iii) preparations for managing liquidity needs in resolution.

EIOPA:

Under the twin objectives of striving to ensure consumer protection and safeguarding financial stability, EIOPA will pursue six strategic areas:

  • Integrating sustainable finance considerations across all areas of work, including promotion of sustainability disclosures, a sustainable conduct of business framework and addressing protection gaps.
  • Supporting the market and supervisory community through digital transformation, including the preparation of regulatory and implementing technical standards from the Digital Operational Resilience Act (DORA), and continuous implementation of the cyber underwriting strategy.
  • Enhancing the quality and effectiveness of supervision, including the provision of training on Solvency II to national authorities in cooperation with DG REFORM.
  • Aiming to ensure technically sound prudential and conduct business policy, including follow-up to the Solvency II review and the provision of technical advice on the scheduled review of the Institutions for Occupational Retirement Provision (IORP) II directive.
  • Identifying, assessing, monitoring and reporting on risks to financial stability and business conduct, and promoting preventative policies and mitigating actions, including the provision of financial stability analyses and risk assessments.
  • Providing effective recruitment, management and development of EIOPA's human capital.

ESMA:

ESMA identifies three cross-cutting themes:

  • Capital markets union:
    • Refining the regulatory and supervisory framework supporting the development of efficient and orderly capital markets, including the European single access point (ESAP).
    • Fostering investor participation through the retail investment strategy.
    • Supporting small and medium-sized enterprises' (SME) access to capital markets.
  • Sustainable finance:
    • Delivering on ESMA's Sustainable Finance Strategy and contributing to the EU transition towards more sustainable financial markets.
    • Striving to ensure that developments relating to ESG-related factors are considered across ESMA's activities.
  • Innovation and digitalisation:
    • Developing the single digital finance rulebook following the adoption of DORA, Markets in Crypto Assets Regulation (MiCA) and the regulation of a pilot regime for market infrastructures based on distributed ledger technology.
    • Furthering understanding of financial innovation's impact on market functioning and participants and fostering a co-ordinated approach to regulatory and supervisory treatment with National Competent Authorities (NCAs).
    • Providing advice to EU institutions, market participants or consumers where appropriate.

And four additional themes:

  • Supervisory convergence – Continuing to contribute to a sound and efficient EU single market by promoting supervisory convergence focused on outcomes and using innovative tools.
  • Risk assessment  Further strengthening risk identification work and co-operation with NCAs and other public authorities at EU and international level, including the European Systemic Risk Board (ESRB), International Organisation of Securities Commissions (IOSCO) and the Financial Stability Board (FSB).
  • Single rulebook – Continuing to develop ESMA as a source of expertise and strategic direction on financial market regulation. Priority areas include contributing to reviews of the Prospectus and Transparency Directives, MiFID II/MiFIR, PRIIPS, Short Selling Regulation, and Central Securities Depositories Regulation (CSDR).
  • Direct supervision  Continuing to intensify ESMA's risk-based preventive approach to supervision and enhance enforcement processes.

European Commission:

The Commission's work programme includes the following financial services-related initiatives:

  • Green finance: An emphasis on green bonds - which are expected to play an increasingly important role in the financing needed for the decarbonisation of European society (as part of the Sustainable Europe Investment Plan).
  • Payments: A proposal to deliver an initiative on instant payments to foster the full take-up of digital payments in the EU.
  • Insolvency: A proposal to take action regarding insolvency proceedings by enhancing convergence and removing discrepancies, increasing efficiency, facilitating cross-border investments and aiming to reduce burden.
  • Capital markets: The simplification of listing requirements, to make public capital markets more attractive for EU companies and facilitate access to capital for SMEs.

Heading into 2022, the ESAs and the European Commission have set themselves challenging books of work. Firms will need to keep up with regulatory developments to help ensure they are appropriately prepared for the changes to come.

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