The European Banking Authority (EBA) published on Wednesday 5 January its opinion on the extent and impact of “de-risking”.
Its findings suggest that this practice has a negative impact on the achievement of the EU’s objectives, in particular in the fight against financial crime and the promotion of financial inclusion, competition and stability in the single market.
As a reminder, “de-risking” is the restriction or termination of business relationships with customers or classes of customers by banks to avoid risk. Financial institutions choose “de-risking” for reasons of profitability, reputation, prudential obligations or fear after a global financial crisis, for example.
The EBA considers that the application of its regulatory guidance on the management of money laundering and terrorist financing risks should help to avoid “de-risking”. It encourages the competent authorities to engage more actively with the establishments and customers concerned, in order to make them mutually aware of their respective rights and responsibilities.
The EBA also advises the European Commission to clarify this in the Payment Services Directive (PSD) and to take advantage of its forthcoming review. Finally, it undertakes to follow up with the competent authorities on the measures they have taken to combat unjustified “de-risking” in the future. (Original version in French by Anne Damiani)