The ESAs and the EU’s new Anti-Money Laundering Authority (AMLA) have signed a multilateral Memorandum of Understanding to formalize cooperation and information exchange. The agreement outlines procedures for coordination and data sharing to support effective supervision across the EU’s financial sector. It aims to enhance supervisory convergence, foster cross-sector learning, and improve consistency in applying AML/CFT rules. This MoU is part of AMLA’s broader mandate to strengthen EU-wide oversight and coordinate with national authorities and Financial Intelligence Units in combating financial crime.
The ESAs (EBA, EIOPA, and ESMA) have launched a public consultation on draft Joint Guidelines for ESG stress testing. These guidelines aim to standardize how banking and insurance sectors integrate environmental, social, and governance risks into supervisory stress tests. Key aspects include:
ESG Stress Testing Framework: Establishes a common approach for developing methodologies and standards across the EU's financial system.
Guidance on Stress Tests: Covers design, features, and organizational arrangements, including expertise, data management, and scenario analysis timelines.
Long-term Approach: Accommodates future advancements and data improvements, promoting consistency and effectiveness.
The consultation runs until September 19, 2025, allowing stakeholders to provide feedback on the draft guidelines.
In 2024, the Joint Committee remained key in analyzing cross-sectoral financial risks, publishing joint risk reports in spring and autumn. The spring report warned of elevated risks from weak growth, uncertain rates, and geopolitical tensions, with concerns over rising credit risk and potential market corrections. The autumn report emphasized ongoing economic uncertainty, market volatility, and the effects of high interest rates. It highlighted inflation risks, operational and cyber threats, and included a detailed focus on credit risk, urging financial institutions to maintain strong risk management, provisioning, and adaptability in facing evolving challenges.
The ESAs Spring 2025 update highlights geopolitical tensions and cyber risks as major threats to EU financial stability. Trade disputes, policy shifts, conflicts, and economic fragmentation demand increased vigilance. Financial institutions face uncertainties in international markets, liquidity, and AI's role. Proactive risk management, cyber resilience, and monitoring global linkages are crucial.
The ESAs report explores centralizing ICT incident reporting for the financial sector under DORA. Three models are considered: baseline, enhanced sharing, and full centralization. The report, developed with input from various stakeholders, aims to inform future decisions on incident reporting centralization.
A 2024 DORA Dry Run, involving ~1,000 EU financial entities, showed promising data quality for information registers. 6.5% passed all checks, and 50% passed most. The ESAs, aiming for high-quality registers by 2025, provided support tools and feedback, and will continue workshops to ensure compliance.