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The Bank Recovery and Resolution Directive (BRRD), a core piece of post-crisis regulation aimed at ending ‘too big to fail’, is being implemented across the EU. As part of the journey towards full and consistent implementation, the European Banking Authority (EBA) recently published a comparative analysis of the recovery plans of 27 (unnamed) European cross-border banking groups which collectively account for around half of the banking assets in the EU.
On 19th March the European Banking Authority (EBA) issued a consultation paper which sets out its approach to limiting exposures from banks to the shadow banking sector, proposing that the large exposures regime be used to restrict exposures, in addition to existing Pillar II requirements.
This is the second of a four-part blog series on the FCA’s Coverholder and TPA thematic review (often referred to by the FCA as its “distribution chain” thematic review)
The diversity and complexity of Coverholder and TPA populations is a challenge when mitigating conduct risk. A risk-based and proportionate solution is fundamental, so starting with a conduct risk assessment is sensible to provide structure and identify the different exposures to conduct risk.
Her Majesty’s Treasury announced on 3 March 2015 that the commencement date for the Senior Managers Regime (“SMR”) will be 7 March 2016, and the Financial Conduct Authority (“FCA”) published its feedback statement on accountability on 16 March 2016. The timeline for commencement of the new regime is set; banks will have until 8 February 2016 to notify the Prudential Regulation Authority (“PRA”) and FCA of the names of all those, including people currently approved, who will be senior managers under SMR.
As we near the outcome of the Financial Conduct Authority’s Coverholder thematic review, general insurance firms across the Lloyd’s and London market should consider how they stack up against regulatory expectations and current good market practice. Over the next month, we will be producing a series of short blogs covering some of the key elements of delegated authority control and oversight that we see the market currently designing and implementing:
Blog 1: Conduct risk assessments
Blog 2: Due diligence, audits and Management Information (MI)
Blog 3: Key market solutions and commercial challenges
The PRA and FCA have published a joint consultation paper (CP) on a series of measures to formalise whistleblowing procedures in firms. The aim is to encourage employees to raise concerns and protect whistleblowers from victimisation. This initiative responds to the Parliamentary Commission on Banking Standards’ recommendation to put in place effective mechanisms to allow employees to raise concerns internally.
UK regulators refine the scope of the Senior Managers Regime and clarify how the ‘Presumption of Responsibility’ will be applied
The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have confirmed how the new Senior Managers Regime (SMR) and Senior Insurance Managers Regime (SIMR) will apply to Non-Executive Directors (NEDs) in banks and insurers respectively. This follows the responses received to the Consultation on Strengthening accountability in banking: a new regulatory framework for individuals –CP14/14 published in July 2014, which expressed concern about the proposed approach to NEDs under the SMR.
FCA competition study may come to have far-reaching implications for investment and corporate banking
The Financial Conduct Authority (FCA) has announced that it will kick-off a market study looking at competition in investment and corporate banking services in spring 2015. This comes as part of its review into competition in the wholesale sector, published yesterday, and follows its call for inputs last July. The FCA has found that limited transparency over both price and quality may make it difficult for clients to assess the value for money of investment banking and corporate banking services, and that bundling and cross-selling of services may make it difficult for new or smaller firms to compete against the established investment banks and universal banks.
The European Commission has fired the starting gun on the Capital Markets Union (CMU), the flagship agenda to deliver a single market for capital, by publishing its widely trailed first green paper (GP). In December we set the scene for the rapidly evolving CMU agenda and, although the GP is wide ranging, it contains little new information.
This is the final entry in our series of three blogs which cover the topic of third party risk. In this article, we explore the design and implementation of frameworks which organisations are implementing in order to help them manage the third party risk. We highlight some of the stages and challenges of creating such a framework and the requirement to make it specific to your organisation in order for it to be successful.