Global Regulator & Central Bank News Roundup

Volume 23/2024 (June 3 – June 9)

 

Your weekly summary of key regulatory updates in an objective bite-size format, drawing on official news and press releases from 700+ financial services regulators, central banks as well as global and regional standard setters. For more current updates, visit Regxplora, Regxelerator’s end-to-end automated and generative AI-powered financial regulatory intelligence platform. Sign up here to receive the roundup via email.
 


Themes covered in this edition
 

 


Prudential & financial stability
 
EBA Initiates Consultation on Three Draft Technical Standards for Operational Risk Losses in EU Banking Sector
The European Banking Authority (EBA) has launched a consultation on three sets of draft Regulatory Technical Standards (RTS) related to operational risk losses in the banking sector. These RTS aim to harmonize the recording of operational risk losses, clarify exemptions for calculating annual operational risk loss, and guide adjustments to loss data sets post-mergers or acquisitions. Specifically, the first draft RTS establishes a detailed risk taxonomy for categorizing operational risk events. In line with the Basel operational risk taxonomy, the taxonomy distinguishes between Level 1 and more granular Level 2 event types, which are designed to be mutually exclusive and collectively exhaustive. Additionally, it introduces so-called attributes or flags to support the identification of (macro) risk events / categories, which are independent from the Level 1 event category. The second draft RTS outlines conditions under which institutions may find it unduly burdensome to calculate annual operational risk loss, allowing for temporary waivers in such cases. The third draft RTS provides guidance on integrating loss data from merged or acquired entities, specifying the currency and risk taxonomy to be used as well as providing a formula for the temporary calculation of the annual operational risk loss to be applied in circumstances when an institution is unable to promptly include the loss data set of the acquired or merged entity, or activity, into the loss data set of the reporting institution. Comments on the proposals can be submitted until 6 September and a public hearing via webinar is scheduled for 4 July. The intention is to finalize the three RTS until year-end.

 


AML & CFT
 
Egmont Group’s 30th Plenary Advances Global AML Efforts with Expanded Membership and Enhanced Cooperation Initiatives
The Egmont Group has successfully concluded its 30th annual Plenary in Paris, France, with a focus on enhancing global cooperation against money laundering and terrorist financing. Co-chaired by Elzbieta Franków-Jaskiewicz of the Polish FIU and Antoine Magnant of Tracfin, the event involved participation of 400 delegates and 15 observer organizations. The Plenary’s central theme, “The Next Generation FIU,” addressed through three sub-topics, aimed at developing future workforce capabilities, leveraging technology for enhanced effectiveness, and tackling emerging financial crimes. In line with their commitment to fight these threats, member FIUs reaffirmed their dedication to improving analytical tools and methods, sharing best practices, and fostering international cooperation. The Plenary welcomed new members from Suriname, Maldives, and Liberia, expanding the Egmont Group’s reach to 177 members. Key outcomes included the endorsement of an Information Exchange Working Group’s Project Report on analytical tools and cloud services for FIUs and the signing of 33 Memorandums of Understanding to improve intelligence sharing. Additionally, leadership roles were assigned for various working groups and regional representatives for a two-year term ending after the 2026 EG Plenary. The event also featured workshops on topics such as trade-based money laundering and misuse of corporate structures.

 


Cyber & operational resilience
 
IOSCO Finalizes Good Practices Report to Enhance Trading Venue Resilience Against Market Outages
Following the consultation from earlier this year, the International Organization of Securities Commissions (IOSCO) has finalized its report on Market Outages, providing a set of good practices aimed at enhancing the resilience of trading venues in the event of market disruptions. The report encapsulates key findings from recent market outages and introduces five good practices for regulators, trading venues, and market participants to better prepare for and manage future outages, covering: (1) Outage plans, (2) communication plans, (3) reopening of trading, (4) closing auctions and prices, as well as (5) post-outage plans. Designed with flexibility in mind, these practices are adaptable across different trading venues, asset classes, and market structures regardless of the root cause of the outage. The detailed summary of the document including the good practices can be accessed here.

 

APRA Encourages Entities to Enhance Data Backup Strategies To Improve Cyber Resilience
In an effort to strengthening cyber resilience, the Australian Prudential Regulation Authority (APRA) has communicated the importance of data backups in a new supervisory letter directed to entities under its regulatory purview. The letter outlines several prevalent shortcomings in current backup practices that could impede effective system recovery in the event of a cybersecurity incident. Notably, these include: (1) Insufficient segregation between production and backup environments, (2) Insufficient control testing coverage and rigour to ensure backups are protected from compromise, and (3) Insufficient testing of capability to recover systems and data within tolerance levels from backups. To address these shortcomings, APRA recommends among other things to ensure sufficient isolation of backups from the production environment including appropriate access controls that prevent any single account or person to have permission to modify or delete both production and backup. Furthermore, entities must ensure that their testing program confirms the effectiveness of backups and their protection against unauthorized access, modification, or alteration, and that the extent of backup coverage is adequate to facilitate the restoration of critical business operations, as well as the technical ability to recover systems and data within acceptable limits. Regulated entities are expected to perform thorough reviews of their backup systems against these areas.

 

European Supervisory Authorities and ENISA Establish MoU to Enhance Cybersecurity in EU Financial Sector
The European Supervisory Authorities (EBA, EIOPA, and ESMA) have concluded a Memorandum of Understanding (MoU) with the European Union Agency for Cybersecurity (ENISA) to enhance cooperation and information exchange in cybersecurity within the financial sector. This MoU aims to enhance cooperation and information exchange in order to strengthen cybersecurity in the EU’s financial sector in line with the objectives of the NIS2 Directive and the Digital Operational Resilience Act (DORA). Specifically, the agreement delineates the areas of cooperation such as in relation to policy implementation, incident reporting, and oversight of critical Information Communication Technologies (ICT) third-party providers, thereby supporting regulatory convergence, facilitating cross-sectoral learning, and building capacity on areas of mutual interest while fostering information exchange on emerging technologies.

 

ECB Seeks Feedback on Draft Guide for Bank Outsourcing to Cloud Services
The European Central Bank – Banking Supervision has launched a public consultation on its new Guide on outsourcing cloud services. The Guide is designed to clarify the ECB’s interpretation of legal requirements and supervisory expectations for banks utilizing cloud computing services, aiming to ensure consistent supervision and maintain a level playing field. It addresses risks identified by the ECB, such as IT security vulnerabilities and potential business disruptions due to dependency on third-party service providers, many of which are concentrated in non-European countries. These findings emerged from the 2023 Supervisory Review and Evaluation Process and have placed third-party risk management, including cloud outsourcing, as a priority for 2024-2026. Aligning with requirements under the Digital Operational Resilience Act (DORA) and the Capital Requirements Directive, the Guide sets out specific supervisory expectations in five core areas: (1) Governance of cloud services, (2) availability and resilience of cloud services, (3) ICT security, data confidentiality and integrity, (4) exit strategy and termination rights, and (5) oversight, monitoring and internal audits. Comments on the proposed Guide can be submitted until 15 July.

 

FINMA Issues Guidance on Cyber Risk Management and Reporting Following Supervisory Reviews
The Swiss Financial Market Supervisory Authority (FINMA) has published guidance on its findings from supervisory activities in the area of cyber risks. The guidance highlights supervisory findings in four critical areas: (1) Outsourcing, (2) governance and identification, (3) protective measures as well as (4) detection, response and restoration. Key identified shortcomings include inter alia significant vulnerabilities in relation to outsourcing due to insufficient cybersecurity measures at service providers, contributing to over half of all successful attacks on supervised institutions during 2022/23. Specifically, institutions frequently lack clear cybersecurity requirements and audits for their service providers, which often is exacerbated by the failure to maintain a comprehensive inventory of service providers and outsourced functions. Additional points identified include deficiencies in the identification of the specific cyber threat landscape and failure to articulate cyber risk appetite and tolerance; underdeveloped protective measures including a widespread lack of testing backup and recovery plans against severe cyber-attack scenarios along with gaps in cyber training and awareness across all levels of the organization; and a lack of comprehensive response plans and failure to review their effectiveness. Besides raising awareness on these deficiencies, FINMA has also been strengthening its cyber risk supervisory toolkit through red teaming and tabletop exercises with supervised entities.

 


Fintech & ecosystem innovation
 
BIS Working Paper Explores Fintech’s Role in Enhancing Competition and Innovation in Banking Sector
The Bank for International Settlements has released a working paper that presents a comprehensive literature review on the impact of financial technology (fintech) on competition within the banking sector. The paper offers a detailed overview into how fintech has been a catalyst for innovation and heightened competition in various banking services, including payments, lending, deposit taking, and advisory services. It underscores that the emergence of new fintech-based service providers has not only broadened access to financial services but also challenged the market share and pricing strategies of traditional banks, highlighting that fintech firms have notably evolved from their initial roles as lenders or payment facilitators to offer an expanded suite of financial services. Despite this evolution and increased competition, the review suggests that traditional banking models that bundle multiple services may still hold enduring advantages. The report also touches upon consumer benefits such as enhanced digitalization and reduced costs for financial services, advancements in data processing, machine learning for credit risk assessment, and concerns regarding biases in algorithmic versus human investment advice. The detailed summary of the document can be accessed here.

 

EBA Issues Final Reports on Expectations for Governance, Conflicts of Interest Management and Remuneration under MiCAR
The European Banking Authority (EBA) has further advanced its work to operationalize the Markets in Crypto-Assets Regulation (MiCAR) with the publication of the final reports on the expectations for governance, conflicts of interest management and remuneration for issuers of asset-referenced tokens (ARTs) and electronic money tokens (EMTs). The final guidelines on the minimum content of the governance arrangements for issuers of asset-referenced tokens lay out minimum expectations for sound governance arrangements in line with established European regulation, including with respect to the allocation of roles and responsibilities across the management body, organizational structure, the internal control framework, as well as risk culture and business conduct. The Regulatory Technical Standards (RTS) on the minimum content of the governance arrangements on the remuneration, which are applicable to both ARTS and EMTs, specify the main governance processes regarding the adoption and maintenance of the remuneration policy and the main policy’s elements that should be adopted with the goal of promoting sound risk management without incentivizing reduced risk standards. Finally, the RTS on conflicts of interest for issuers of ARTs define the requirements for the policies and procedures to manage potential conflicts, especially concerning asset reserves and group structures. Following their publication, these guidelines and RTS await translation into EU official languages before being submitted to the European Commission for adoption.

 

Central Bank of Ireland Announces Planned Launch of Innovation Sandbox Programme in Q4 2024
The Central Bank of Ireland has announced plans to establish an Innovation Sandbox Programme later in 2024. Consistent with similar initiatives, the programme is designed to offer regulatory advice and support for innovative projects that contribute positively to society and the financial system. Following a three-month public consultation and a Feedback Statement, the bank has decided on a thematic approach for the sandbox, with themes and calls for participants to be announced in the coming months. The first programme is set to commence in Quarter 4 of this year. Eligibility for participation is broad, welcoming applications from anyone developing financial system innovations through a transparent application process. Deputy Governor Sharon Donnery highlighted that these initiatives are part of a strategic transformation in regulation and supervision by the Central Bank, aiming to harness innovation benefits while managing associated risks. The bank also released its Innovation Hub Update for 2023, showing increased engagement with firms and suggesting continued innovation within Ireland’s financial services sector. The Central Bank will maintain transparency regarding programme outcomes and conduct regular reviews to ensure effectiveness for all stakeholders involved.

 

U.S. Treasury Issues RFI on AI Integration in Financial Services Sector
The U.S. Department of the Treasury has released a Request for Information (RFI) to explore the uses, opportunities, and risks associated with Artificial Intelligence (AI) in the financial services sector. Building on the Treasury’s recent efforts to address cybersecurity and fraud related to AI, as well as other federal agencies’ initiatives, the RFI encompasses 19 questions aimed at deepening the Treasury’s understanding on the application of AI in financial services across the value chain, the potential opportunities and benefits associated with AI, as well as the specific risks including in relation to AI explainability and bias, consumer protection and data privacy, and third-party risk. Additionally, the RFI calls for suggestions on potential additional actions from a legislative, regulatory, or supervisory perspective that could support the responsible adoption of AI. Under Secretary for Domestic Finance Nellie Liang emphasized the Biden Administration’s commitment to encouraging innovation while safeguarding against new technology risks. Comments to the RFI can be provided over a 60-period until early August.
The RFI comes on the heels of a Conference on AI and Financial Stability hosted by the U.S. Department of the Treasury in partnership with the Brookings Institution, which featured panels on AI’s financial stability risks, promoting safe AI adoption, and regulatory perspectives from the Financial Stability Oversight Council (FSOC) and member agencies. Secretary of the Treasury Janet L. Yellen, in her keynote address, underscored both the benefits and challenges AI presents to the financial sector, emphasizing that AI can enhance efficiency and access to financial services but also poses risks due to its complexity and potential for creating systemic vulnerabilities. She referred to the FSOC’s Analytic Framework as a tool providing insights into these risks and outlined Treasury’s commitment to ongoing research and stakeholder engagement. Acting Comptroller Hsu also delivered a keynote speech, focusing on systemic risk implications of AI in banking, accountability issues, and advocating for a collective responsibility framework for AI safety.

 

FINRA Foundation Report Explores Consumer Trust in AI for Financial Advice
The Financial Industry Regulatory Authority (FINRA) has published a new report by the FINRA Investor Education Foundation titled “The machines are coming (with personal finance information). Do we trust them?” which examines consumer trust in artificial intelligence (AI) for personal financial advice. The report is based on an experimental study with over 1,000 U.S. adults who were asked to evaluate the trustworthiness of AI-generated financial information compared to that provided by a financial professional, focusing on homeownership, projected stock and bond performance, portfolio allocation, and savings and debt information. Key findings reveal that while a majority of respondents rely on financial professionals (63%) and friends and family (56%) for financial advice, only 5% use AI. Trust levels varied depending on the type of information; for homeownership, more trusted a financial professional over AI, while projected stock and bond performance saw roughly equal trust in both sources, with white men and those with higher self-assessed financial knowledge showing a preference for AI. Portfolio allocation was more trusted from professionals than AI, whereas savings and debt information was generally trusted from both sources, with Black respondents showing greater trust in professionals. The study underscores the need for the financial services industry to understand how consumers interact with AI to provide them with effective resources for making informed financial decisions.

 

Brazil’s PREVIC Selects AI Initiatives to Enhance Pension Fund Monitoring Efficiency and Security
The Brazilian Pension Funds Authority (PREVIC) has announced its selection of two artificial intelligence-based projects aimed at enhancing the efficiency and security of pension fund monitoring. The two shortlisted projects encompass Finor Consultoria Empresarial Ltda, which is tasked with developing a solution to improve data collection on pension fund investments, including the application of filters and indicators for legislative adherence and atypical operation alerts, and Matemática Executiva Consultoria Ltda, which will focus on monitoring actuarial risks, employing AI to estimate insolvency risk in benefit plans and facilitate quicker response times for correction plans. The initiatives are intended to improve transparency and reliability within the closed supplementary pension system and are in line with PREVIC’s commitment to leveraging technology for better supervision and inspection of private pension entities. The projects, which will receive substantial financial subsidies totaling over R$5 million, are expected to be completed within a 24-month timeframe for operationalization in 2026.

 


Payments & money
 
BIS Innovation Hub’s Project mBridge Achieves MVP Status, Expands Global Collaboration for Cross-Border CBDC Platform
The Bank for International Settlements (BIS) has announced that Project mBridge has reached the minimum viable product (MVP) stage and is expanding its international cooperation with new full members and observers, while inviting further participation from the private sector. Initiated back in 2021 through a collaboration between the BIS Innovation Hub, the Bank of Thailand, the Central Bank of the United Arab Emirates, the Digital Currency Institute of the People’s Bank of China, and the Hong Kong Monetary Authority, Project mBridge aims to address inefficiencies in cross-border payments by leveraging a multi-central bank digital currency (CBDC) platform. The mBridge Ledger, a blockchain-based platform developed for real-time cross-border payments and foreign exchange transactions, successfully conducted a pilot with real-value transactions in 2022. A bespoke governance and legal framework has been established for the MVP platform, which includes a rulebook tailored to its decentralized nature. The MVP platform is now capable of undertaking real-value transactions and is compatible with Ethereum Virtual Machine to facilitate testing of add-on technology solutions. As part of the expansion, the Project has welcome the Central Bank of Saudi Arabia as new full participants alongside over 26 observers. Additionally, the BIS calls on private sector firms to propose value-added solutions that can connect the mBridge MVP platform to further develop its capabilities.

 

BIS Innovation Hub Launches Project Rialto to Enhance Instant Cross-Border Payments via wCBDC Settlement
The Bank for International Settlements Innovation Hub has announced Project Rialto, an initiative aimed at enhancing instant cross-border payments through a novel approach that integrates a modular foreign exchange (FX) component with settlement in wholesale central bank digital currencies (wCBDC). Recognizing the G20’s prioritization of improving cross-border payments due to the current inefficiencies—such as high costs, slow processing times, and exposure to various risks in FX services—Project Rialto seeks to address these challenges by exploring decentralized solutions and interlinked payment infrastructures. The project is a collaborative effort involving the BIS Innovation Hub Eurosystem and Singapore Centres, along with multiple central banks, focusing on developing an automatic FX settlement layer that leverages wCBDC as a secure settlement asset. This could potentially be applied to interconnected instant payment systems or digital asset systems. The name “Rialto” symbolizes both the bridging of gaps in cross-border payment infrastructure and the marketplace dynamics of automatic FX settlement using wCBDC. This initiative builds upon previous projects like Mandala, which aimed at automating transaction monitoring for policy compliance in cross-border payments, and mBridge’s exploration of DLT for peer-to-peer CBDC transactions, indicating a continued commitment by BISIH towards advancing global payment systems through innovative technology.

 

Bundesbank Survey Reveals German Public’s Acceptance and Misconceptions of Digital Euro Initiative
The Bundesbank has shared insights from a recent survey conducted by forsa on the acceptance and understanding of the digital euro among the German public. The survey, which polled 2,012 individuals in April 2024, found that half of the participants are open to using a digital euro as an additional payment option. However, only 41% had prior knowledge about it, indicating significant unawareness. Privacy concerns emerged as a major consideration, with over three-quarters of respondents emphasizing its importance in relation to the digital euro’s use. Furthermore, 72% expressed the necessity for the digital euro to operate on European infrastructure to ensure independence from global political influences. Furthermore, misconceptions persist; 15% mistakenly believe the digital euro will replace cash and 12% fear cash abolition upon its introduction. Only a minority correctly identified that the Eurosystem central banks would issue the digital euro as an additional means of payment rather than a cryptocurrency or tool for monitoring payments. Addressing these misunderstandings is a priority for Bundesbank President Joachim Nagel and Executive Board member Burkhard Balz, who underscored ongoing efforts to prioritize privacy protection in preparation for this new European means of payment. The Eurosystem’s decision on launching the digital euro awaits EU legislative groundwork, with initial transactions potentially occurring by 2028 at the earliest following regulatory developments post-European elections and based on the Single Currency Package introduced by the European Commission in June 2023.

 

BCRP Collaborates with NPCI to Launch Retail Digital Payments Platform for Financial Inclusion in Peru
The Central Reserve Bank of Peru (BCRP) has announced the implementation of a new retail digital payments platform, in collaboration with the National Payments Corporation of India (NPCI), aimed at extending digital payment instruments to over a third of Peruvians who currently lack them. Specifically. the initiative targets the 48 percent of the population without bank accounts and seeks to enhance financial inclusion by enabling private providers to offer innovative payment solutions. The platform will serve as an additional infrastructure, complementing existing ones, and will be open for voluntary use by both current financial institutions and wallets, as well as potential new market entrants. It is designed to promote fluid transactions between users regardless of their banking or payment medium, thereby expanding capacity for industry growth within the digital payments sector in Peru. General Manager Paul Castillo highlighted that the platform will not only support electronic wallets but also other value-added payment instruments, fostering interoperability and allowing users to conduct transactions seamlessly across different platforms. The design of the BCRP’s system is adapted from the real-time retail payments platform launched in India in 2016 by NPCI, which allows for secure and efficient transactions among various entities such as banks, non-banks, Fintechs, and Bigtechs.

 


ESG
 
European Supervisory Authorities Issue Final Reports on Greenwashing, Recommend Strengthened Supervision and Market Practices in Sustainability Claims
The European Supervisory Authorities have each published their final reports on greenwashing I the financial sector, calling for enhanced supervision and improved market practices regarding sustainability-related claim. The ESAs define greenwashing as misleading practices where sustainability-related information does not accurately reflect an entity’s or financial product’s sustainability profile, potentially deceiving consumers, investors, or other market participants. To combat this, the ESAs propose a coordinated approach to supervision that includes a stocktake of current responses to greenwashing risks and a forward-looking view on how to improve sustainability-related supervision. The European Banking Authority’s report specifically addresses the banking sector, noting a significant rise in greenwashing cases and emphasizing the reputational and operational risks involved. It recommends that institutions ensure their sustainability claims are accurate, substantiated, up-to-date, fairly represent their overall profile or that of their products, and are understandable. Meanwhile, the European Insurance and Occupational Pensions Authority’s response includes key proposals to enhance supervision in the insurance and pension sectors by setting out four principles for national supervisors: accuracy and fairness in sustainability claims; substantiation with clear reasoning and facts; accessibility of information for stakeholders; and timely updates on material changes. Additionally, EIOPA suggests regulatory improvements such as clarifying non-life insurance products with sustainability features within the Insurance Distribution Directive (IDD).

 


Other transversal themes
 
IOSCO Issues Final Report on Good Practices for Leveraged Loans and CLO Markets
The International Organization of Securities Commissions (IOSCO) has finalized its Final Report on Leveraged Loans and Collateralised Loan Obligations (CLOs), offering a set of Good Practices for market participants. The report addresses concerns over investor protections, transparency, and potential conduct-related issues, outlining 12 good practices organized around five key themes: (1) sound origination and refinancing principles; (2) clarity in EBITDA calculations and loan documentation; (3) alignment of interests from loan origination to end investors; (4) consideration for the diverse interests across the intermediation chain; and (5) ongoing disclosure requirements. These practices are intended to guide market participants, including originators, arrangers, and investors in leveraged loans and CLOs, fostering decision-making that aligns with the objectives to enhance investor protection, ensure fair and efficient markets, and reduce systemic risk. The report is informed by feedback from a public consultation initiated in September 2023 and builds upon recent market developments that have raised questions about the robustness of investor protections amid growing complexity in borrower characteristics and market practices. The detailed summary of the document can be accessed here.

 


Leadership changes
 
BIS Appoints Nithya Navaratnam as Deputy Head of Banking Department
The Bank for International Settlements (BIS) has announced the appointment of Nithya Navaratnam as the new Deputy Head of the Banking Department, effective from 1 July 2024 for a five-year term. Ms. Navaratnam, who previously served as the Head of Credit Risk Management at BIS since 2020, brings experience from her tenure at Goldman Sachs, where she held various regional and global credit risk leadership roles in New York and Singapore. Her academic credentials include a bachelor’s degree in Computer Engineering, a Master of Science in Financial Engineering, and an MBA in Finance from Columbia University. She will be succeeding Luis Bengoechea, who was recently appointed as Head of the Banking Department on 1 June 2024.

 

WFE CEO Nandini Sukumar Re-Elected as Vice Chair of IOSCO AMCC for Fourth Term
The World Federation of Exchanges (WFE) has announced the re-election of its CEO, Nandini Sukumar, to her fourth term as Vice Chair of the International Organization of Securities Commission’s (IOSCO) Affiliate Members’ Consultative Committee (AMCC). The AMCC, which consists of 68 IOSCO affiliate members including exchanges and market intermediaries, aims to foster experience sharing and cooperation among its members. In her role at the WFE and within the IOSCO framework, Ms. Sukumar has been instrumental in driving engagement among affiliate members to support IOSCO’s goals of investor protection, market integrity, and financial stability. Her continued leadership will focus on contributing to IOSCO’s policy and standard-setting work, particularly in the area of market-based finance.

 

Rwanda Capital Markets Authority Appoints Thapelo Tsheole as new CEO
The Rwanda Capital Markets Authority has announced the appointment of Mr. Thapelo Tsheole as its new Chief Executive Officer. Tsheole’s background includes an 8-year tenure as CEO of the Botswana Stock Exchange and significant roles at the Central Bank of Botswana. Additionally, he has held several board positions including at the Special Economic Zone Authority, Botswana Accountancy Oversight Authority, and the African Integrated Reporting Committee as well as received the he Presidential Order of Meritorious Service from Botswana’s President in 2018 for his contributions to the development of financial markets in Botswana. Focus of his work will include driving forward the development of the Rwanda’s capital markets in line with the country’s 10-year Capital Market Master Plan.

 

ECB Banking Supervision Announces Appointment of Donnery, Machado, and Montagner to Supervisory Board
The European Central Bank – Banking Supervision has appointed Sharon Donnery, Pedro Machado, and Patrick Montagner as the new ECB representatives on its Supervisory Board for non-renewable five-year terms. They will be taking over from Edouard Fernandez-Bollo, Kerstin af Jochnick, and Elizabeth McCaul, whose terms are set to conclude between August and November of this year. Donnery currently holds the position of Deputy Governor at the Central Bank of Ireland and is already a member of the ECB’s Supervisory Board. Machado serves as a Board Member and Director of Resolution Planning and Decisions at the Single Resolution Board, while Montagner is the First Deputy Secretary General and Head of Insurance Supervision and Commercial Practices for Banking and Insurance Sectors at France’s Prudential Supervision and Resolution Authority, in addition to being on the Board of Supervisors at the European Insurance and Occupational Pensions Authority. The Supervisory Board, which is responsible for planning and executing the ECB’s supervisory tasks, is chaired by Claudia Buch with Frank Elderson as Vice-Chair. The board comprises representatives from 21 national competent authorities along with four members appointed by the ECB.

 

Austria FMA’s Oliver Schütz Elected Chair of EBA’s Resolution Committee
The Austria Financial Market Authority has announced that Oliver Schütz, its Managing Director for Banking Resolution, has been elected as the Chairperson of the European Banking Authority’s Resolution Committee (ResCo), succeeding Sebastiano Laviola. ResCo plays a pivotal role in bank resolution within the European Union, preparing decisions relevant to resolution such as draft Regulatory Technical Standards and Implementing Technical Standards, aimed at ensuring harmonized and consistent processes across the EU, particularly for financial institutions operating cross-border, in line with the EU Bank Recovery and Resolution Directive (BRRD). In his capacity as Chairperson of ResCo, Schütz will among other things be responsible for developing coordination of resolution plans and methods for resolving failing financial institutions.

 

PSR Appoints David Geale as Interim Managing Director
The UK Payment Systems Regulator (PSR) has announced the appointment of David Geale as the Interim Managing Director, effective from 10 June for a nine-month tenure, following the confirmation that Chris Hemsley will step down as Managing Director effective 7 June. Geale transitions to this role from the Financial Conduct Authority (FCA), where he served as Director of Retail Banking and was responsible for supervision and policy. His experience is complemented by his position as a non-executive director on the PSR Board since February 2020. Following the interim period, which will bridge the gap until after the general election, the PSR plans to initiate the recruitment process for a permanent Managing Director.

 


Cross-border cooperation
 
Brazil CVM and China SRC Establish MoU for Capital Market Integrity and Investor Protection Cooperation
The Brazil Securities Commission (CVM) has entered into a MoU with the Securities Regulatory Commission of China (CSRC), aimed at fostering cooperation in investor protection and ensuring the integrity of their respective capital markets. The memorandum outlines several key initiatives, including the development of joint financing instruments such as green bonds to support sustainable development goals, initiating discussions to strengthen exchange-traded fund (ETF) products, and leveraging innovative technology in financial supervision (Suptech) to enhance effective oversight of securities markets. Additionally, it establishes a communication channel for exchanging information on investor education and financial literacy.