The European Banking Association (EBA) will launch a joint initiative with the European Systemic Risk Board (ESRB) and the Financial Stability Board (FSB) in which regulators will assess the relationship between traditional banks and financial institutions outside the banking sector.
José Manuel Campa, Chair of the European Banking Association (EBA), told the Financial Times that the regulators would start examining the relationship between traditional banks and financial institutions outside the banking sector. As part of the initiative, the European Systemic Risk Board (ESRB) and the Financial Stability Board (FSB) would evaluate hedge funds, private investment funds, and cryptocurrency platforms.
According to Campa, the study of non-bank financial institutions (NBFI) will provide insight into how deeply the banking sector depends on the stability of financial organizations outside of it. Examining the relationship would help gauge the extent of potential contagion in stressed situations, the official said.
Campa also noted that the association previously assessed banks’ balance sheet exposures to NBFIs, including loans. The EBA analysts said the non-bank sector was mostly shadowy because the quality of data available for verification was very patchy.
According to the FSB estimates, NBFI accounts hold about 46% of the total value of global assets, which is almost $218 trillion. At the same time, traditional banks hold just over $183 trillion.
Earlier, the EU banking regulator came up with an initiative to update the AML and CFT rules for payment service providers and crypto-asset service providers (CASP), obliging them to identify the participants of transactions.
Сообщение EU Financial Regulators to Examine Banks’ Ties to Crypto Companies появились сначала на CoinsPaid Media.
