A timely build-up of capital buffers that can be released in times of stress is essential for financial stability. One way to achieve this is by setting a positive countercyclical capital buffer (CCyB) rate early in the cycle when cyclical systemic risks are neither subdued nor elevated. Understanding how authorities can apply this “positive neutral” approach is essential to advancing the use of the CCyB. The European Central Bank (ECB) and the European Systemic Risk Board (ESRB) has published a joint report aimed at deepening our knowledge of the implementation of positive neutral approaches to setting the CCyB in the European Economic Area (EEA). Continue reading…

by Olli Rehn

Distinguished Guests, Ladies and Gentlemen, Dear Friends, let me start by thanking the Hong Kong Monetary Authority for hosting this topical and thought-provoking conference. Discussing the changing global economy in “Asia’s World City” is, of course, very appropriate. As the title of the conference implies, the global economy is undergoing a transformation. In my talk today I would like to address a key aspect of this transformation, namely decoupling and fragmentation in the global economy. Is there evidence of geoeconomic fragmentation in the global trade and investment data? Or is global trade simply following the same trajectory as global economic output? There is, of course, an important difference between the paths of global trade and global output. Continue reading…

The Prudential Regulation Authority (PRA), in consultation with HM Treasury, has decided to delay the implementation of Basel 3.1 in the UK by one year until 1 January 2027. This allows more time for greater clarity to emerge about plans for its implementation in the United States. Basel 3.1 is the final set of international banking reforms designed in response to the 2008 global financial crisis. It is designed to improve banks’ own measurement of risk, standardising approaches between firms to make their capital ratios more consistent and comparable. Continue reading…

Eurojust has supported the German and Dutch authorities in stopping a series of severe retaliatory attacks between criminals using explosives and firearms to settle scores. A total of 23 suspects have been arrested, including three during an action day this week. Eurojust assisted with the execution of European Arrest Warrants (EAWs) and European Investigation Orders (EIOs) and coordinated the judicial cooperation between the authorities.

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The European Banking Authority (EBA) has launched its 2025 EU-wide stress test and released the macroeconomic scenarios. This year’s exercise is designed to provide valuable input for assessing the resilience of the European banking sector in the current uncertain and changing macroeconomic environment. The adverse scenario is based on a narrative of hypothetical worsening of geopolitical tensions, with large, negative, and persistent trade and confidence shocks having strong adverse effects on private consumption and investments, both domestically and globally. Continue reading…

The FCA has found wholesale brokers need to enhance their systems, controls, risk awareness and training to guard against money laundering. The FCA focused on wholesale brokers in its review because of the important role they play in capital markets in facilitating deals. The regulator also engaged with other market participants to understand wider risks, issues and good practice, recognising that collaboration with and across industry is essential to delivering real improvements. This report will assist any firms involved in the capital markets to improve their controls and prevent financial crime. Continue reading…

The European Commission has requested consultations at the World Trade Organization (WTO) aiming to remove unfair and illegal trade practices by China in the sphere of intellectual property. China has empowered its courts to set binding worldwide royalty rates for EU standard essential patents, without the consent of the patent owner. This pressures innovative European high-tech companies into lowering their rates on a worldwide basis, thus giving Chinese manufacturers cheaper access to those European technologies unfairly. Continue reading…

As the hub for cross-border judicial cooperation, Eurojust works together with national authorities to fight organised crime. Our support and expertise helps authorities to solve complex investigations into a variety of crime types. In 2024, we saw a number of long running cases lead to joint operations that arrested suspects, seized goods and stopped criminals in their tracks. Continue reading…

The Financial Stability Board (FSB) has recently put forth a report on The Relevance of Transition Plans for Financial Stability, which looks at the role that firms’ climate transition planning and the resulting outputs – transition plans – can play for financial stability. Transition plans provide forward-looking information on how non-financial companies and financial institutions may adjust their activities in response to climate risks, which can be useful for authorities to measure and monitor climate-related financial risks. Continue reading…

The BIS Committee on Payments and Market Infrastructures (CPMI) announced further steps to promote the adoption of its harmonised ISO 20022 data requirements for more efficient processing of cross-border payments. The announcement should provide clarity to industry regarding the medium-term governance and maintenance of the harmonised data requirements during the period of global transition to the ISO 20022 messaging standard. These steps also provide impetus to industry-led efforts to develop ISO 20022 market practice guidelines for cross-border fast payments. Continue reading…