04 October 2021

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

EU and U.S. participants in the EU - U.S. Joint Financial Regulatory Forum (“theForum”) met virtually on September 29 and 30, 2021, to exchange views on topics of mutualinterest as part of their ongoing 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), the
Single Supervisory Mechanism (SSM), the Single Resolution Board (SRB) and the European
Systemic Risk Board (ESRB).

U.S. participants included officials from the U.S. Department of the Treasury and staff from
independent regulatory agencies, including the Board of Governors of the Federal Reserve System
(FRB), Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation
(FDIC), Securities and Exchange Commission (SEC), and Office of the Comptroller of the
Currency (OCC). U.S. participants expressed views on issues in their respective areas of
responsibility.

The Forum underscored EU and U.S. cooperation and focused on six themes: (1) market
developments and current assessment of financial stability risks, (2) sustainable finance, (3)
multilateral and bilateral engagement in banking and insurance, (4) regulatory and supervisory
cooperation in capital markets, (5) financial innovation, and (6) anti-money laundering and
countering the financing of terrorism (AML/CFT).

The European Union and the United States are currently experiencing robust economic recoveries.
At the same time, the uncertainty around the path of the COVID-19 pandemic and the economic
outlook has not dissipated. In this rapidly evolving setting, cooperative international engagement
to mitigate financial stability risks remains essential.

Participants recognized the importance of addressing climate-related challenges for the financial
sector and discussed their priorities relating to sustainable finance, along with addressing climate-
related financial risks, consistent with their respective mandates. They shared updates on the new
EU strategy for financing the transition to a sustainable economy adopted in July and on the U.S.
administration’s climate priorities relating to the financial sector. Consistent with their respective
mandates, participants shared views on potential approaches to aligning private investments to
sustainability goals. In that regard, the European Union provided an update on its new rules
supplementing the EU Taxonomy Regulation to classify environmentally sustainable economic
activities in companies.

Participants discussed their ongoing work on climate and other
sustainability-related financial disclosures. In that regard, the European Union referred to its
proposed Corporate Sustainability Reporting Directive, including the development of mandatory
EU sustainability reporting standards, and, in the United States, SEC staff indicated that they are
developing rule proposals addressing consistent, comparable, and decision-useful disclosures
around climate risk and human capital. Participants recognized the value of continuing the recent
bilateral technical-level exchanges on sustainability-related disclosures. Participants also
discussed assessment of and possible financial regulatory and supervisory responses to climate-

related financial risks, including with respect to the insurance sector. They welcomed progress in
international forums, including the G20 Sustainable Finance Working Group, and the International
Platform for Sustainable Finance.

Regarding banking, participants discussed the implementation of Basel III reforms, as well as the
treatment of foreign bank branches by both jurisdictions, and Regulatory Technical Standards on
Prudential Requirements for Investment Firms. They also discussed developments in the field of
insurance, including the EU’s review of the Solvency II framework and its new framework for
recovery and resolution of (re)insurers, and implementation of the EU - U.S. Covered Agreement.
Participants also discussed FATCA issues relevant to citizens and financial firms.

On capital markets, participants discussed their continued monitoring of the transition from panel
reference rates and the progress in their respective legislative and supervisory efforts to ensure a
smooth transition away from LIBOR. They exchanged views on the upcoming EU reviews of the
Alternative Investment Fund Managers Directive and of the Markets in Financial Instruments
Regulation. They also compared notes on their respective efforts in the area of money market
funds, and took stock of ongoing discussions regarding data transfers and the registration of EU
funds in the United States.

Participants welcomed continued progress on implementation of the SEC’s substituted compliance
regime with respect to EU-domiciled security-based swap dealers, including the Memorandum of
Understanding between the SEC and the European Central Bank. Participants also discussed
CFTC plans for implementing new capital and financial reporting requirements for swap dealers.

In addition, participants shared views on developments regarding financial innovation and recent
efforts by the European Union and the United States to improve operational resilience in the
financial sector. Participants also discussed considerations regarding any potential central bank
digital currencies and exchanged views on recent developments including, where relevant,
regulatory proposals involving new forms of digital payments, crypto-assets, and so-called
stablecoins. Participants acknowledged the importance of ongoing international work on financial
innovation and recognized the benefits of greater international supervisory cooperation with a view
to promote responsible innovation globally.

Participants also discussed progress made in strengthening their domestic AML/CFT frameworks.
The European Union updated the Forum on the Commission’s July 2021 adoption of a new
AML/CFT legislative package, and the United States provided an update on its ongoing
implementation of the Anti-Money Laundering Act of 2020, enacted as part of the National
Defense Authorization Act. Participants also exchanged views on the opportunities and challenges
arising from financial innovation in the AML/CFT area and explored potential areas for enhanced
cooperation to combat money laundering and terrorist financing bilaterally and in the framework
of FATF.

Participants acknowledged the importance of the Forum in fostering ongoing financial regulatory
dialogue between the United States and European Union. They agreed that regular communication
on regulatory and supervisory issues of mutual concern is necessary to support financial stability,
investor protection, market integrity, and a level playing field.


Participants will continue to engage on these topics, as well as on other topics of mutual interest,
ahead of the next Forum meeting, which is expected to take place in early 2022.

European Commission

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