The European Banking Authority (EBA) set out at the end of October the priority areas of supervision for the banking sector that national competent authorities should include in their 2023 work programme.
The long-term effects of the Covid-19 pandemic, amplified by the repercussions of the Russian invasion of Ukraine as well as other emerging risks, are having a “considerable impact” on bank asset quality and posing challenges to the strategies of European credit institutions, the EBA notes.
On this basis, the European authority has identified four areas of intervention: geopolitical and macroeconomic risks, operational and financial resilience, risks inherent in the climate transition and digitalisation, risks related to money laundering and terrorist financing for the supervisory processes and internal governance of banking groups.
In addition to these priority areas, the national competent authorities point to the growing importance of areas - such as the impact of climate and digital transitions on banks’ strategy and profitability, cybersecurity, exposure to Covid-19-affected sectors and the prevention of ‘leverage buy-out’ risks - that can be given greater consideration in future supervisory cycles.
See the EBA priorities: https://aeur.eu/f/3vp (Original version in French by Mathieu Bion)