Joint Statement on the EU-U.S. Financial Regulatory Forum

The U.S. Department of the Treasury, USDT, has published a press release informing about the latest EU – U.S. Joint Financial Regulatory Forum. The forum – which was comprised of persons representing the European Central Bank (ECB), the European Commission (EC), the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), and others on the part of European regulators and by representatives of the USDT, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FED), the Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), and the Securities and Exchange Commission (SEC) – thereby focused on the following key topics:
(1) market developments and current assessment of financial stability risks: A key issue in this context was – naturally – the continuing aggression of the Russian Federation towards Ukraine, the persisting high levels of inflation, and the global economic situation. Another point of discussion was the prevailing uncertainty and the effects of such upon the financial markets. Furthermore, the attendees engaged in a discussion regarding the recent occurrences in the banking industry and the subsequent reactions in the market. They both emphasized the significance of maintaining robust „bank prudential standards, resolution frameworks, and their effective implementation“, along with ensuring strong supervision practices.
(2) regulatory developments in banking and insurance: Key topics in this area included the implementation of the Basel 3 reform in both jurisdictions and the European Commission’s progress as regards the EU’s legislative proposal on the insurance recovery and resolution directive. In the context of insurance, the EU attendees also presented an update on the EU’s Climate Resilience Dialogue concerning the insurance protection gap for climate change-related risks. Finally, U.S. regulators explained the state of play regarding the recent U.S. bank failures (Silicon Valley Bank, Signature Bank, and First Republic Bank) and the work that is being done in this area by the FDIC.
(3) sustainable finance: Both parties informed each other of ongoing activities as regards ESG disclosures in the financial markets and discussed prevailing ESG risks, particularly climate-related risks. The European Commission also presented its latest legislative proposal concerning the requirements of ESG rating agencies, gave an update on the development of the EU’s sustainability reporting standards, and provided an overview of its broader sustainable finance agenda.
(4) capital market supervision: In this context, participants discussed the progress in their respective legislative and supervisory efforts to ensure a „smooth transition away from LIBOR“. They also shared updates regarding recent developments on capital markets rules, which encompassed ongoing work to enhance transparency concerning security-based swaps on part of U.S. regulators. Additionally, the parties engaged in discussions about fund reforms and exchanged perspectives on the United States‘ efforts to shorten the settlement cycle.
Finally, the regulators exchanged views and information regarding (legislative) activity as to anti-money laundering and countering the financing of terrorism (AML/CFT), regarding recent developments in the crypto-assets market, and regarding the EU’s initiative and latest legislative proposal for the establishment of a digital EURO.