Financial Crime World

ITALY: BANKING REGULATIONS TO STRENGTHEN COOPERATION AND CLIMATE RISK MITIGATION

Strengthening Cooperation Among Supervisory Authorities

The Bank of Italy and Consob have signed a memorandum of understanding to facilitate the performance of their respective functions regarding supervised entities. This agreement aims to enhance the overall stability and resilience of the Italian financial system by promoting greater collaboration among supervisory bodies.

Enhanced Cooperation on Non-EU Banks

The Bank of Italy has also joined the Multilateral Memorandum of Cooperation (MMC) sponsored by the European Central Bank, which enables competent authorities to supervise credit institutions branches with head offices in third countries more effectively. This move promotes good practices and collaboration among national supervisory bodies.

Economic Outlook and Monetary Policy

  • The global economy is slowing down due to strong geopolitical tensions and deceleration in economic activity in China.
  • Inflation is declining in advanced economies, and monetary policy remains tight.

The Bank of Italy has been focusing on climate-related and environmental risks by hosting roundtables with Italian banks and other financial intermediaries. These events aimed to foster an open dialogue between supervisory authorities and supervised entities to share experiences and establish good practices for mitigating these risks.

International Cooperation

  • The Bank of Italy, Consob, and the Swiss Financial Market Supervisory Authority (FINMA) have signed a Memorandum of Understanding to facilitate their respective functions on supervised entities.
  • This agreement promotes greater cooperation and coordination among the three authorities, enhancing financial stability and consumer protection.

European Banking Authority’s Stress Test

The European Banking Authority (EBA) has published the results of its 2023 EU-wide stress test, which covered the largest European banking groups. The exercise aimed to assess the resilience of these institutions to adverse economic scenarios and identify areas for improvement.

Conclusion

These recent developments underscore the Bank of Italy’s commitment to strengthening cooperation among supervisory authorities, mitigating climate-related risks, and enhancing financial stability in Italy.