The financial conglomerates directive gives national financial authorities in the EU additional responsibilities and tools to supervise financial conglomerates. While specific banking and insurance regulations are already applicable to the banking activities of financial conglomerates, this directive requires supervisors to apply supplementary supervision to financial groups in order to reduce the risks inherent in their activities.
Following the financial crisis, the directive was amended in 2011 to give national financial supervisors new powers to oversee the conglomerates' parent entities, such as holding companies. This allows banking, insurance and supplementary supervision to happen at the same time, thereby closing loopholes identified during the crisis.
Amended Financial Conglomerates Directive