Supervisory cooperation in the fight against financial crime is improving, the EBA finds

EBA issued its third report evaluating the effectiveness of AML/CFT colleges. These colleges are designed as permanent structures to foster collaboration among supervisory bodies overseeing cross-border financial institutions.
The report noted significant progress in improving the functioning of AML/CFT colleges, but it also highlighted several areas where further enhancements are required. One key finding was that despite strides made, a substantial number of AML/CFT colleges have not yet reached full maturity. Approximately 50 colleges had not conducted their initial meetings, indicating a need for more coordinated efforts.
The involvement of prudential supervisors and FIUs in AML/CFT colleges was emphasized as a positive trend. This participation led to more substantial information exchanges and contributed to enhanced cross-border supervision of financial institutions. The report also pointed out the challenge posed by limited participation from third country authorities, which restricts comprehensive risk assessment.
The report’s focus extended to outlining good practices for improving AML/CFT colleges. It underscored the importance of finalizing structural aspects, ensuring high-quality discussions during meetings, promoting cooperation among members, applying a risk-based approach, identifying common areas for action, and strengthening supervisory convergence.
EBA’s monitoring methodology encompassed three forms of assessment: general monitoring, active monitoring, and thematic monitoring. Thematic monitoring was highlighted by a focus on the asset management sector, revealing issues related to cooperation agreements, participation, and the inclusion of third-country activities.