13 February 2023

Joint Statement on the U.S.-EU Financial Regulatory Forum

The Forum emphasized close ongoing EU and U.S. cooperation in a range of areas, and focused on six themes: (1) market developments and financial stability risks; (2) sustainable finance and climate-related financial risks; (3) regulatory developments in banking and insurance;...

The U.S.-EU Joint Regulatory Forum took place on February 7-8, 2023, with participants exchanging views on topics of mutual interest as part of their regular financial regulatory dialogue.
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 representatives from the U.S. Department of the Treasury and independent regulatory agencies, including 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), and Securities and Exchange Commission (SEC). U.S. participants expressed views on issues in their respective areas of responsibility.
The Forum emphasized close ongoing EU and U.S. cooperation in a range of areas, and focused on six themes: (1) market developments and financial stability risks; (2) sustainable finance and climate-related financial risks; (3) regulatory developments in banking and insurance; (4) operational resilience and digital finance; (5) regulatory and supervisory cooperation in capital markets; and (6) anti-money laundering and countering the financing of terrorism (AML/CFT).
The current geopolitical situation, triggered by Russia’s unprovoked and unjustified invasion of Ukraine, coupled with uncertainties regarding the global economic outlook and persistent inflationary pressures, exposes the financial system to downside risk both in the EU and in the U.S. However, our financial systems have proven to be resilient. International cooperation in monitoring vulnerabilities and building resilience against stability risks remains essential, in the uncertainty around future geopolitical developments, tightening global financial conditions, and the negative impacts on global energy and commodities markets.
Participants discussed issues related to sustainable finance, mainly ongoing work on climate and other sustainability-related financial disclosures and on climate-related financial risks. The European Commission presented the progress made on the implementation of the Sustainable Finance Disclosures Regulation and on the development of European Sustainability Reporting Standards, as mandated under the Corporate Sustainability Reporting Directive. SEC staff discussed the SEC’s proposals to enhance disclosures regarding issuers’ climate-related risk and enhance disclosures by certain funds and investment advisers regarding ESG practices. EU and U.S. participants agreed to continue the bilateral exchange on sustainability-related disclosures and their engagement in international fora, including on standards being developed by the International Sustainability Standards Board (ISSB). Discussions also turned to the management of climate-related financial risks, where both sides exchanged on recent developments and initiatives to ascertain risks and management practices and challenges.
Participants from both sides also acknowledged the work being done on sustainable finance and climate-related financial risk issues in international fora, including at the G20 Sustainable Finance Working Group and the Financial Stability Board. The EU provided an update on work at the International Platform for Sustainable Finance.
Regarding banking, participants updated each other on developments related to the implementation of Basel III reforms, including on scope and process. This was followed by an exchange on insurance related
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topics, where the European Commission described progress on the Solvency II review and the proposal for an Insurance Recovery and Resolution Directive. A discussion also took place on developments in bank resolution in the participants’ respective jurisdictions, as part of their dialogue to facilitate regular cross-border resolution coordination...

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