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Supplementary supervision of financial conglomerates

What the EU id doing and why

The Financial Conglomerates Directive gives national financial authorities in the EU additional responsibilities and tools to supervise financial conglomerates. While specific banking and insurance regulations are already applicable to the banking activities of financial conglomerates, this directive requires supervisors to apply supplementary supervision to financial groups in order to reduce the risks inherent in their activities.

Following the financial crisis, the directive was amended in 2011 to give national financial supervisors new powers to oversee the conglomerates' parent entities, such as holding companies. This allows banking, insurance and supplementary supervision to happen at the same time, thereby closing loopholes identified during the crisis.

As part of a larger effort to improve EU regulation, the European Commission is currently evaluating whether the directive is fit for purpose, and whether it is delivering on its objective to identify and manage group risks.

Policy making timeline

  1. 20 July 2017
    Staff working document

    Publication of a staff working document assessing the relevance, effectiveness, efficiency, coherence and EU added value of FICOD and its implementation to date (including regulatory technical standards). It takes each of the main areas covered in FICOD – scope; capital; governance; intra-group transactions and risk concentration; supervision and enforcement – and assesses each of them against the criteria in order to assess whether FICOD remains fit for purpose.

  2. 20 December 2012
    Report - Review of the FICOD

    Article 5 of Directive 2011/89/EU required the Commission to deliver a review report before 31 December 2012. The report addresses the scope of the directive, the extension of its application to non-regulated entities, the criteria for identification of financial conglomerates owned by wider non-financial groups, systemically relevant financial conglomerates and mandatory stress testing.

  3. 11 February 2003
    Entry into force - FICOD

    The Financial Conglomerates Directive enters into force.

Relevant legislation