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The European Banking Association (EBA) is set to initiate a collaborative effort with the European Systemic Risk Board (ESRB) and the Financial Stability Board (FSB) to evaluate the connections between traditional banks and financial entities outside the banking sector.
José Manuel Campa, Chair of the EBA, informed the Financial Times that regulators will begin investigating the ties between conventional banks and non-banking financial institutions. This initiative will involve the ESRB and FSB assessing hedge funds, private investment firms, and cryptocurrency platforms.
Campa stated that the examination of non-bank financial institutions (NBFI) will shed light on the extent to which the banking sector relies on the stability of external financial organizations. Analyzing these relationships will assist in understanding the potential for contagion during times of stress, according to the official.
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The Chair also mentioned that the association had previously evaluated banks’ balance sheet exposures to NBFIs, including loans. EBA analysts indicated that the non-bank sector is largely opaque due to the inconsistent quality of available data for verification.
As per FSB estimates, NBFI accounts represent approximately 46% of the total value of global assets, amounting to nearly $218 trillion, while traditional banks hold just over $183 trillion.
Previously, the EU banking regulator proposed an initiative to revise the AML and CFT regulations for payment service providers and crypto-asset service providers (CASP), requiring them to identify transaction participants.
Сообщение EU Financial Regulators to Examine Banks’ Ties to Crypto Companies появились сначала на CoinsPaid Media.
