ECB Publishes Eurosystem Oversight Report
On February 27, the European Central Bank ("ECB") published its 2014 Eurosystem oversight report, the third such report, reviewing the oversight that the Eurosystem has performed in the period from 2011 to mid-2014. The Eurosystem is the monetary authority of the Eurozone and consists of the European Central Bank and the central banks of each of the Eurozone member states.
The oversight report focuses on the Eurosystem's oversight of financial market infrastructures, including payment systems, securities and derivatives clearing and settlement systems and trade repositories.
The oversight report also discusses future work priorities. The future work priorities state that the oversight priorities of the Eurosystem will still be driven by the implementation measures of the regulatory reform process and the need to avoid the emergence of systemic risks in the Eurozone. The Eurosystem will also conduct assessments of the design and operation of T2S, the securities settlement platform operated by the Eurosystem that is set to go live in June 2015. Finally the Eurosystem will continue to conduct regular analyses of correspondent banking activities and is currently reviewing its assessment guides for credit cards, direct debits and credit transfers. Report.
EBA Opinion on Regulation of EU Lending-Based Crowdfunding
On February 26, the European Banking Authority ("EBA") published an opinion on lending-based crowdfunding. The opinion notes that certain Member States (France, Italy, Spain and the UK) have created specific regulations to address risks arising from crowdfunding. Italy's regulation only covers investment-based crowdfunding. In Spain, the draft law in the final approval stages. The EBA concludes that the convergence of practices across the EU for the supervision of crowdfunding is desirable in order to avoid regulatory arbitrage, create a level playing field, ensure that market participants can have confidence in crowdfunding, and contribute to the single European market.
The EBA considers that crowdfunding, whilst still at an early stage, should be regulated by existing legislation, the most relevant being the Payment Services Directive (the "Directive"), but acknowledges that the lending aspects of crowdfunding are not regulated by EU law.
The EBA also stated that the business models of lending-based crowdfunding platforms do not fall inside the perimeter of credit institutions with the result that funds provided by lenders to crowdfunding platforms would not qualify as deposits eligible for protection under a deposit guarantee scheme, representing a further risk to lenders. Opinion.
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