EBA Adopts EU Peer Review Methodology April 2020

• The EBA adopted a peer review methodology in April 2020 to assess supervisory activities across EU competent authorities.
• The methodology involves an ad-hoc committee that operates under terms approved by the EBA Board of Supervisors.
• Peer reviews are conducted in accordance with Article 30 of the EBA Founding Regulation, which requires regular assessments of supervisory activities.

The peer review process involves an ad-hoc committee that operates in accordance with terms of reference approved by the EBA Board of Supervisors.

In April 2020, the European Banking Authority (EBA) adopted a peer review methodology to assess and compare the effectiveness of supervisory activities across competent authorities. This methodology was developed in accordance with Article 30 of the EBA Founding Regulation, which requires the EBA to conduct peer reviews of some or all of the activities of competent authorities. The peer review process involves an ad-hoc committee that operates in accordance with terms of reference approved by the EBA Board of Supervisors. The main findings of each peer review are published unless they pose a risk to financial stability, and any differing opinions from the peer review committee are transmitted confidentially to the European Parliament, Council of the EU, and European Commission.

The EBA's peer review methodology is designed to promote consistency in supervisory outcomes and identify best practices across competent authorities. The methodology includes guidance on self-assessments, reviews by peers, reporting requirements, and follow-up work. It also emphasizes the importance of complementing and avoiding duplication with other EU bodies' review/evaluation projects. The EBA's Founding Regulation, specifically Article 30, provides the legal basis for conducting peer reviews in accordance with a two-year work plan. This framework ensures that peer reviews are conducted consistently and effectively.

The adoption of the peer review methodology by the EBA marks an important step towards strengthening consistency in supervisory outcomes across EU banking supervision. Lawyers and compliance officers should be aware of the potential follow-up measures, including guidelines and recommendations, that may be adopted based on the findings of these peer reviews. These measures can have a significant impact on financial institutions' operations and risk management practices. As such, it is essential for stakeholders to stay informed about the outcomes of these peer reviews and any subsequent regulatory actions.

Lawyers and compliance officers should watch for the EBA's follow-up measures, including guidelines and recommendations, which may be adopted based on the peer reviews' findings.

Source: Original reporting via EU Banking Authority