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Banking Regulations Compliance in Italy: Recent Developments and Initiatives

The Bank of Italy has been actively strengthening its collaboration with supervised entities, demonstrating a commitment to ensuring the stability and soundness of the financial system.

Memorandum of Understanding between the Bank of Italy and Consob

On February 27, 2024, the Bank of Italy signed a memorandum of understanding with Consob, the Italian Companies and Stock Exchange Commission. This agreement aims to facilitate the performance of their respective functions regarding supervised entities, promoting cooperation and effective supervision.

Multilateral Memorandum of Cooperation (MMC)

On February 22, 2024, the Bank of Italy joined the MMC sponsored by the European Central Bank (ECB). The MMC is designed to foster cooperation on non-EU banks, making operative the new supervisory cooperation requirements envisioned under the Capital Requirements Directive. This initiative aims to ensure that competent authorities supervising credit institutions branches with a head office in a third country and the competent authorities of institutions that are part of the same third-country group work together effectively.

Reports on Financial Stability and Supervision

In December 2023, the Bank of Italy published several reports on financial stability and supervision. These reports include:

Notes No. 35: Bad loan recovery rates in 2022
Notes No. 34: Risk-weighted assets dynamics for Italian and SSM banks over the last three years
Financial Stability Report No. 2, which highlighted concerns about the global economy’s slowdown, geopolitical tensions, and inflation.

In November 2023, a roundtable was held at the Bank of Italy to discuss supervisory expectations for climate-related and environmental risks. The event aimed to foster an open dialogue between supervisory authorities and supervised entities to exchange experiences and establish good practices.

Memorandum of Understanding between Consob, the Bank of Italy, and FINMA

Earlier in November 2023, Consob, the Bank of Italy, and the Swiss Financial Market Supervisory Authority (FINMA) signed a memorandum of understanding to facilitate the performance of their respective functions on supervised entities. This agreement demonstrates the importance of cooperation among financial authorities.

European Banking Authority’s EU-Wide Stress Test Results

In July 2023, the European Banking Authority (EBA) published the results of the 2023 EU-wide stress test conducted jointly by the EBA and the ECB.

These recent developments underscore the importance of banking regulations compliance in Italy. The country’s financial authorities continue to prioritize stability, supervision, and cooperation with international partners to ensure a safe and sound financial system for all stakeholders.