European Banking Authority
Deposit Guarantee Schemes Directive - EBA consults on methods for calculating contributions - 29 July 2022
The European Banking Authority (EBA) has published a Consultation Paper (EBA/CP/2022/10) on draft Guidelines on methods for calculating contributions to deposit guarantee schemes (DGSs) under the Deposit Guarantee Schemes Directive (2014/49/EU) (DGSD) (the revised Guidelines). The revised Guidelines will repeal and replace the EBA’s previous Guidelines on the topic (EBA/GL/2015/10) (the original Guidelines), which were published in May 2015.
The EBA is consulting on several improvements to the original Guidelines, including the introduction of a formula for determining the risk adjustment factor for each member institution that seeks to align the riskiness of institutions and their DGS contributions.
The deadline for responses is 31 October 2022.
EBA Consultation Paper: Draft Guidelines (revised) on methods for calculating contributions to deposit guarantee schemes under Directive 2014/49/EU repealing and replacing Guidelines EBA/GL/2015/10 (EBA/CP/2022/10)
Webpage
Press release
Financial Conduct Authority
Approach to remuneration - FCA publishes letter to Committee Chairs - 2 August 2022
The FCA has published a letter addressed to the Remuneration Committee Chairs of proportionality level one banks, building societies and PRA designated investment firms, from the FCA’s Executive Director of Markets, Supervision, Policy and Competition, setting out its expectations for remuneration outcomes.
The letter refers to the new Consumer Duty, noting that a firm’s remuneration policies should be designed to support the expectations set by the Consumer Duty when it comes into effect. It also addresses operational resilience, stating that: “[I]n the event of service disruptions, data breaches or other interruptions, we would expect firms to respond appropriately, such as making remuneration adjustments where appropriate, and to recover and learn from the experience.” As firms respond to evolving regulatory, societal and customer expectations in the area of ESG, they are encouraged to review whether incentives for their senior leadership and other material risk takers are aligned to wider ESG risk factors. The letter also points out that remuneration and incentives have a part to play in supporting diversity in firms.
The FCA will consult on a package of measures to promote diversity and inclusion in the financial services sector, which will include proposals to make changes to the responsibilities of the Remuneration Committee.
FCA letter to Chair, Remuneration Committee [of proportionality level one Banks, Building Societies and PRA designated investment firms]
Updated webpage
Mortgage switching - FCA publishes statement - 2 August 2022
The FCA has published its latest statement on switching in the mortgage market. Among other things, the statement sets out the FCA’s expectations for lenders in this context, which include:
- considering what more they can do to encourage mortgage borrowers to think about switching to a less costly option where that is available.
- considering their overall approach to communicating information to make sure they equip consumers to make effective, timely and properly informed decisions and to monitor the outcomes borrowers receive. Whilst the Consumer Duty is not yet in force, the statement notes that firms should not wait to apply these requirements and should look for opportunities to support consumers to make the decisions they need to make; and
- treat those who cannot switch fairly and support those in financial difficulties.
The FCA highlights its June 2022 Dear CEO letter, sent to mortgage lenders and administrators and reported previously in this Bulletin, in which it outlined its expectations in more detail. The statement concludes that the case for further regulatory intervention is not currently justified since the number of borrowers who can switch but do not switch when it may save them money to do so is very low.
FCA Statement: Switching in the mortgage market - an update
Press release
