Glossary

European Banking Authority (EBA)

Established in January 2011 as part of the European System of Financial Supervision (ESFS), The European Banking Authority (EBA) is tasked with regulating and supervising the banking sector across Europe. Its overall goal is to safeguard and protect the EU’s financial stability and the integrity and efficient functioning of the banking sector. 

What are the Objectives of the European Banking Authority?

The EBA was established in order to provide the banking industry in Europe with a high level of regulation and supervision to combat financial crimes. It’s objectives include:

  • Protecting the integrity of the financial industry.
  • Regulating financial institutions.
  • Protecting consumers and investors by keeping the financial system stable.
  • Ensuring market transparency. 
  • Monitoring the performance and adherence to regulations of any new tools used by institutions.

What are the EBA’s Main Responsibilities?

The primary responsibility of the EBA is its contribution to the European Single Rulebook in banking. This Rulebook provides financial institutions across the EU with a standardized set of rules that they all must follow in order to protect their customers and investors. 

The other responsibilities of the EBA include:

  • Conducting regular risk assessments in the banking sector.
  • Investigating potentially unlawful behavior or activities.
  • Acting as the decision-maker for financial institutions in emergency situations.
  • Mediating among authorities in cases of cross-border disputes.
  • Serving as an independent advisory body for the European Parliament.
  • Promoting market transparency for consumers. 
  • Preventing money laundering and terrorist-financing activities.

Who is Required to Comply with the European Banking Authority?

The EBA is responsible for the regulation and monitoring of institutions throughout the EU that fall into the following categories: banks, investment firms, eCommerce merchants, credit or lending institutions, and insurance companies. 

The EBA has authority over all financial institutions operating in the EU, regardless of their country of origin. Any institution conducting any type of banking activity in the EU is subject to the local laws and regulations. Because the EU is made up of a number of countries, each does have their own financial industry regulations. However, the EBA has the authority to overrule any of the national regulators should there be conflict, and it is the EBA that has the final say in financial regulation misconduct anywhere in the EU. 

EBA Reporting Requirements

As part of a bid to standardize the reported financial information to make it easier to compare across organizations and to make the supervisory process more efficient, the EBA introduced two reporting requirements – Common Reporting (COREP) and Financial Reporting (FINREP).

COREP

All banks, investment companies and building societies are obligated to report under COREP. The report includes information on market, operational and credit risks as well as capital adequacy ratios and funds. 

FINREP

FINREP is the reporting structure required by credit institutions, banks, and investment companies that are listed on a stock exchange and meet certain other requirements. The main objective of FINREP is to gather more information than what is included in financial reports in a standardized way to create one central repository for all European banking information. 

 

Completing these reporting requirements can be an onerous process for financial institutions, but there are digital tools that can make it easier. A solution like LeapXpert can ensure that records of all digital communications are stored and made easily accessible should they be needed for reporting purposes and/or to prove compliance with regulations.