EU financial market regulators publish supervisory expectations in the context of the conflict in Ukraine – Financial services

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On March 11, 2022, the European Banking Authority issued a prudential statement reminding financial institutions to ensure compliance with sanctions and other restrictive measures as well as to facilitate refugees’ access to basic payment accounts following the activation of the European directive on temporary protection.1

On March 14, the European Securities and Markets Authority (ESMA), in collaboration with the respective competent national authorities (CNA), released its supervisory expectations and coordinated regulatory response to the conflict in Ukraine and its impact on EU financial markets.2

The two statements from EBA and ESMA are short and compact, but they each raise questions as to what they failed to cover. The other sister authority, the European Insurance and Occupational Pensions Authority (EIOPA) monitors the exposure of companies under its jurisdiction but has not yet (certainly at this time) issued any official statements.3 The same goes for the European Central Bank (ECB), acting in its capacity as the banking union at the head of the Single Supervisory Mechanism (MSS), except that it concluded that corporate exposures may be more resilient than expected.4 The ECB, in its monetary policy role, also continues to monitor the economic impact and adjust its toolkit as necessary.

In addition to statements issued at EU level, many NCAs have issued similar or broader statements. Therefore, supervised companies will want to ensure that they meet all prudential expectations applicable to their activities in the EU-27.

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Footnotes

1. The EBA publication is available here.

2. ESMA’s publication is available here.

3. Although the President of EIOPA# commented on the situation on March 25, 2022 in an interview available here.

4. See the ECB-SSM presentation available here.

Originally published March 2022

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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