EU – U.S. Joint Financial Regulatory Forum in Brussels Tackles Topics Like AML, Climate Risk, Digital Finance

Last week in Brussels, the EU – U.S. Joint Financial Regulatory Forum took place where policy makers tackled various aspects of global financial services.

EU participants included representatives of the European Commission, the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA), the European Insurance and Occupational Pensions Authority (EIOPA), the European Central Bank (ECB), and the Single Resolution Board (SRB).

U.S. participants included officials from the U.S. Department of the Treasury and staff from the Board of Governors of the Federal Reserve System (FRB), Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), as well as the Public Company Accounting Oversight Board (PCAOB).

According to a joint statement distributed by the US Department of Treasury, the topics discussed included:

(1) market developments and financial stability risks,

(2) sustainable finance and climate-related financial risks,

(3) regulatory developments in banking and insurance,

(4) regulatory and supervisory cooperation in capital markets,

(5) operational resilience and digital finance, and

(6) anti-money laundering and countering the financing of terrorism (AML/CFT).

While details of discussions were not provided, it appears that a fair amount of conversation involved sustainable finance and management of climate-related financial risks.

The SEC staff apparently provided an overview of its controversial rulemaking proposal aiming to require reporting companies to disclose their climate risk.

The meeting also reviewed digital finance and operational risk, and resilience.

The EU updated the U.S. on the provisional agreement reached on the Digital Operational Resilience Act (DORA).

The conversation apparently touched upon developments regarding crypto-assets, including stablecoins.

EU participants shared information on the recently agreed upon Markets in Crypto-Assets regulation (MiCA) rules.

Discussions around the development of potential central bank digital currencies also were said to have taken place.

Strengthening AML/CFT framework was reviewed with both sides sharing updates.

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