The Joint Committee of the European Supervisory Authorities (ESAs), the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA), has published its annual report for 2024.

The report highlighted the implementation of Digital Operational Resilience Act (DORA) and ongoing work for the Sustainable Finance Disclosure Regulation (SFDR) as key priorities in 2024.

The ESAs worked with several key European organisations such as the European Central Bank, European Network and Information Security Agency, European Systemic Risk Board, and Single Resolution Board to complete all the tasks assigned under DORA.

These tasks included creating detailed rules and guidelines to help financial companies follow DORA correctly.

A new group called the Oversight Forum will be created in 2025 to help monitor the oversight framework, and it will be part of the Joint Committee.

The report also outlined the ESAs advanced work on sustainable finance, with a focus on the SFDR.

This included publishing joint opinions in the context of a comprehensive review of the SFDR framework, a set of Q&A to answer questions from stakeholders and members about the application of the SFDR, and publishing its third annual report on principal adverse impact disclosures.

The annual report also highlighted the Joint Committee’s work on two joint risk reports in the Spring and Autumn of 2024.

The spring risk report highlighted elevated risks due to slowing growth, an uncertain interest rate environment, and ongoing geopolitical tensions.

It also noted “significant” uncertainty despite strong financial market performance in anticipation of potential interest rate cuts in 2024 in the EU and the US.

In addition to this, the report also found that there was potential for increased credit risk as refinancing needs grew.

The report also showed that defined benefit (DB) pension schemes improved their financial position. However, liquidity positions slightly weakened, and challenges from subdued growth and risk repricing persisted.

Meanwhile, the autumn risk report emphasised the ongoing economic uncertainties, inflation concerns, and operational risks, particularly cyber threats.

Against this backdrop, the report called on financial institutions, supervisors, and market participants to remain prepared for possible ongoing effects of the then still relatively high interest rates on the real economy.
 
The ESAs also continued to explore and monitor potential emerging risks for financial markets participants and the financial system in 2024.

The main areas of cross-sectoral focus in 2024 were joint risk assessments, sustainable finance, operational risk and digital resilience, consumer protection, financial innovation, securitisation, financial conglomerates, and the European Single Access Point (ESAP). 

The ESAs made “significant” progress on the ESAP project in 2024, with the final report submitted to the European Commission and published by the ESAs on 29 October 2024.

The European Commission is currently assessing it and is expected to adopt it in the second quarter of 2025.

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