The European Banking Authority has published a report on the EU non-bank lending sector i.e., the growing number of financial intermediaries operating outside the EU financial services regulatory perimeter, including BigTech firms (e..g, Meta, Amazon and Google) and FinTech firms, which develop innovative technology for financial services.
The report responds to the European Commission's 2021 call for advice on digital finance, which sought input to advance the EU Digital Finance Strategy. The European Supervisory Authorities (the EBA, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority) published a joint report on digital finance in response to the Commission's call for advice in January 2022. However, the call for advice had also sought analysis specifically from the EBA on the non-bank lending sector and whether there was a need to adjust the regulatory perimeter to address any issues arising from growth in the sector.
The EBA's report reviews potential risks arising in the non-bank lending sector and makes recommendations on the regulatory approach to the following areas:
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