strategic plan 2016-2020...1 strategic plan 2016-2020 directorate-general for financial stability,...

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Strategic Plan 2016-2020* Directorate-General for

Financial Stability, Financial Services and Capital Markets Union

*The current Commission's term of office runs until 31 October 2019. New political orientations provided by the incoming

Commission for the subsequent period will be appropriately reflected in the strategic planning process.

Ref. Ares(2016)1732125 - 12/04/2016

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Contents

PART 1. Strategic vision for 2016-2020 ................................................................................. 3

A. Mission statement ............................................................................................................ 3

B. Operating context ............................................................................................................ 4

C. Strategy ............................................................................................................................ 6

D. Key performance indicators (KPIs) ............................................................................... 27

PART 2. Organisational management ................................................................................... 28

A. Human Resource Management ..................................................................................... 28

B. Financial Management: Internal control and Risk management ................................... 29

C. Better Regulation (only for DGs managing regulatory acquis) .................................... 30

D. Information management aspects .................................................................................. 31

E. External communication activities ................................................................................ 32

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PART 1. Strategic vision for 2016-2020

A. Mission statement

In just a few years, following the outbreak of the financial crisis, the EU has put forward an ambitious

and unprecedented series of reforms to secure financial stability and improve the supervision of

financial markets.

The mission of the Directorate-General for Financial Stability, Financial Services and Capital Markets

Union (DG FISMA) is to ensure the development of well-regulated, stable and globally competitive

financial markets in the interest of businesses and consumers. To improve access to capital for

businesses, especially SMEs, and thereby promote growth and job creation, the DG brings forward

initiatives to create an EU-wide Capital Markets Union. In addition, DG FISMA monitors the

effectiveness of its reforms, ensures that EU legislation is fully implemented and responds to

emerging financial risks.

This means:

• Initiating policies that contribute to jobs, growth and investment in the EU by enhancing

the long-term financing of the economy whilst ensuring financial stability. This requires

further progress towards a well-regulated EU Capital Markets Union encompassing all 28

Member States;

• Consolidating financial reforms while adapting them to changed circumstances if needed,

and ensuring that EU legislation is properly enforced;

• Presenting new initiatives to close remaining legislative gaps and to ensure that financial

markets are well regulated and supervised;

• Making financial services work better for consumers and retail investors;

• Working closely with international partners to promote global consistency in regulation

and the implementation of agreed standards and principles.

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B. Operating context

Under the leadership of Commissioner Hill, DG FISMA is responsible for initiating and implementing

policy in the area of banking and finance. DG FISMA contributes to projects steered by Vice-

Presidents Jyrki Katainen (in charge of Jobs, Growth, Investment and Competitiveness) and Valdis

Dombrovskis (in charge of the Euro and Social Dialogue).

DG FISMA uses the whole panoply of the Commission's legal and legislative interventions. FISMA has

a strong regulatory role, based in particular on treaty articles 53(1), which deals with the right of

establishment, and 114, which concerns the establishment and functioning of the internal market, of

the Treaty on the Functioning of the European Union (TFEU). DG FISMA’s enforcement activities are

also very prominent, given the number of legislative rules put in place, especially in recent years.

FISMA is also actively involved in the development of delegated and implementing acts (the so-called

Level II process), based on articles 290 and 291 of the treaty, with or without prior preparation of

technical standards by the three European Supervisory Authorities.

DG FISMA monitors the implementation and application of EU law, covering EU regulations and

directives in the area of financial services, as well as any unjustified restrictions to the free

movement of capital as defined by article 63 TFEU. DG FISMA assists Member States in the

transposition of EU directives, assesses the completeness and correctness of national transposition

measures, monitors how EU law is applied in practice, handles complaints and launches cases on

possible breaches of EU law by Member States on its own initiative.

In developing its legislation and policy, DG FISMA interacts with national parliaments and with the

other EU institutions, such as the European Parliament and the Council of the European Union,

through representation at meetings and on committees. The DG interacts in particular with the

Parliament’s Economic and Monetary Affairs (ECON) Committee and the rotating presidency of the

Council. It also represents the Commission in the Financial Services Committee and Economic and

Financial Committee and plays an active role in the context of the European Semester.

DG FISMA exercises the function of the ultimate authority in the context of bank resolution. As such,

it ensures that any bank resolution takes place in a way that does not jeopardise financial stability

while preserving market discipline via the bail-in rules, which are aimed at minimising the use of

public funds for a bank resolution.

DG FISMA works in close cooperation with, and contributes to the work of the European Central

Bank, the Single Supervisory Mechanism, the Single Resolution Mechanism, the Single Resolution

Board, and the European Systemic Risk Board. The European Commission is a non-voting member of

the European Supervisory Authorities' Boards of Supervisors; and may be invited on an ad-hoc basis

to the meetings of the ECB Supervisory Board. At the Single Resolution Board the Commission has

the role of a permanent observer.

DG FISMA also maintains and develops relations with trade associations, consumer organisations,

NGOs and citizens. Representatives of DG FISMA actively engage with external stakeholders,

including the academic community, industry representatives and related regulatory institutions.

In an international context, DG FISMA pays special attention to the global regulatory framework, and

engages proactively in the development of international standards. DG FISMA actively contributes to

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the work of international standard setters, such as the Basel Committee on Banking Supervision, the

International Association of Insurance Supervisors, and the International Organization of Securities

Commissions. The DG participates in the economic and financial regulatory agenda of the G20 and

Financial Stability Board where it shares its reflections on global financial stability and economic

challenges and contributes to policy and regulatory commitments. DG FISMA also engages bilaterally

with a large number of major partners so that necessary frameworks for regulatory cooperation can

be developed. DG FISMA is involved in international trade and investment negotiations, such as the

Transatlantic Trade and Investment Partnership (TTIP).

The achievement of DG FISMA's general objectives could be affected by various factors and

stakeholders.

Major reforms have been implemented since the onset of the financial crisis to improve the

resilience of the financial sector, but further financial turmoil that could limit the DG's ability to

promote economic growth in the EU and to ensure greater financial stability can never be excluded.

They could stem from economic developments and financial risks within the EU and the EU financial

sector itself, or from financial, geopolitical or macro-economic risks that originate outside the EU.

Furthermore, the overall situation of the EU and the global economy will continue to affect the DG's

activities. Although the EU economy and many other economies around the globe are slowly

recovering from recession, world growth prospects remain modest. Specific conditions such as the

strength of the euro, oil prices, inflation expectations and the overall economic sentiment are all

relevant factors for future growth which are not under the full control of the DG.

The decision-making process constitutes another important external factor. DG FISMA's work

consists in large part of regulatory work. After having been adopted by the Commission, legislative

proposals prepared by DG FISMA are submitted to the European Parliament and the Council. The

final texts adopted by those institutions may differ from the Commission's proposal which may affect

their ultimate impact.

In a similar vein, DG FISMA depends on external partners for the implementation of its goals and

activities. The European Supervisory Authorities play a leading role in the preparation of regulatory

and implementing technical standards. Delays in this process can have an effect on DG FISMA’s work.

Moreover, EU legislation has to be transposed and applied by Member States in a timely and correct

way in order for it to have the intended beneficial effect. The failure of Member States to do this may

have a negative impact on the financial system.

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C. Strategy

Between 2009 and 2015 a whole battery of measures was introduced at the EU level, establishing an

overall architecture that has made the financial system safer and more resilient throughout the

whole of the European Union. One key achievement is the Banking Union, which centralises

responsibilities, banking supervision and resolution in the euro area.

In 2014, President Juncker put forward his plan to renew the European Union on the basis of an

Agenda for Jobs, Growth, Fairness and Democratic Change. This agenda, which aims to rebuild

Europe after the financial and economic crisis and to restore European citizens’ confidence, focuses

on ten policy areas.

Over the next five years, DG FISMA will concentrate its efforts on three of these policy areas in which

it will develop and propose a range of effective and targeted measures. Its top priorities under the

leadership of Commissioner Hill will be to support growth and jobs while ensuring financial stability;

to develop capital markets; to help markets work more effectively – in particular in relation to retail

finance – and to push to complete the Banking Union.

These priorities contribute to three general objectives: The first reflects the DG’s work to support

growth and job creation by improving the investment environment and the long-term financing of

the economy. The Capital Markets Union will take centre stage in this effort. The second – creating a

deeper and fairer internal market – encompasses the many initiatives devised by the DG to improve

the functioning of financial markets for the benefit of consumers and businesses. The third objective

covers DG FISMA’s work towards a full-fledged Banking Union to shore up the EU’s resilience against

financial crises and protect depositors.

General Objective 1: A New Boost for Jobs, Growth and Investment.

Boosting jobs, growth, and investment is the Juncker Commission's number one priority. DG FISMA's

first objective is to create a firm basis for an EU financial system that is conducive to growth, jobs and

investment.

Given its responsibilities, and given the importance of financial services to the EU economy, DG

FISMA is particularly well placed to contribute to this priority. In his mission letter to Commissioner

Hill, the first task given by President Juncker was to “Contribute to (...) jobs, growth and investment

(…) by outlining measures to improve the investment environment and presenting concrete

initiatives on the long-term financing of the economy”.

DG FISMA’s flagship initiative with respect to this objective is the Capital Markets Union. It is

designed to complement the EUR 315 billion Investment Plan launched by the Commission in 2015

and to reinforce the Economic and Monetary Union. It aims at improving Europe’s business and

investment environment, especially for SMEs – a Europe 2020 objective – and encouraging the long-

term financing of the economy.

The coming years will be largely devoted to laying the foundations of the Capital Markets Union. An

Action Plan,1 launched in the autumn of 2015, sets out the measures necessary to make the free flow

1 COM(2015) 468

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52015DC0468

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of capital a reality by linking savings with growth and thereby offering new opportunities to savers

and investors.

One of the key goals of the Capital Markets Union is to diversify sources of funding. It should mobilise

capital in Europe and channel it to all companies, including SMEs, infrastructure and long-term

sustainable projects. Europe's capital markets are still relatively underdeveloped and fragmented.

The European economy is as big as that of the U.S., but Europe’s equity markets are less than half the

size; its debt markets less than a third.

Specific objectives 1.12 and 1.23 are targeted at bridging these gaps. The Commission will be taking a

range of steps over the coming years to make it easier for companies to raise equity and debt

finance. Modernising the rules governing prospectuses and launching a package of measures to

support venture capital and equity financing in the EU will be just two of the actions that will

contribute to solving the funding gap.

Small- and medium-sized enterprises are critical to driving growth in the economy and in creating

new jobs. The Capital Markets Union aims to create an environment in which SMEs can raise

financing as easily as large companies. Access to funding for SMEs is currently fragmented in the EU.

Specific objective 1.34 is to reduce that fragmentation, deepening financial integration in the EU.

Europe requires significant new long-term and sustainable investment to maintain and boost its

competitiveness and shift to a low-carbon and resource-efficient economy. Institutional investors, in

particular insurance companies and pension funds, are natural long-term investors. Specific objective

1.45 is therefore to encourage such investment in addition to encouraging bank investment and

lending.

Identifying barriers to the free movement of capital in the EU and knocking down them down will be

essential in underpinning the Capital Markets Union. Specific objective 1.56 aims to do exactly that.

The Commission, working with Member States, will map and work to remove unjustified national

barriers to the free movement of capital.

Specific objective 1.67 is to increase the cross-border investment flow. Despite progress in recent

decades, there are still many obstacles that stand in the way of cross-border investment. These range

from obstacles that have origins in national law, such as insolvency, tax and securities law, to

obstacles arising from fragmented market infrastructure. Removing some of the long-standing

barriers would yield significant benefits to capital raisers, investors, and the EU economy as a whole.

The aim here is to create more integrated EU capital markets, which would also increase the

attractiveness of the EU as an investment destination for global investors.

General Objective 2: A Deeper and Fairer Internal Market with a Strengthened Industrial Base.

The Single Market is one of Europe’s major achievements and its best asset in times of increasing

globalisation. It is an engine for building a stronger and fairer EU economy.

2 Companies raise more equity in public and private capital markets. 3 Debt funding for the corporate sector, in particular for SMEs, is more diversified. 4 Access to funding for SMEs is less fragmented. 5 Banks, insurance companies and pension funds have greater incentive to invest in and lend to the real economy

in a sustainable way, including investing in long-term European projects. 6 Barriers to the free movement of capital are identified and eliminated. 7 An increased cross-border investment flow.

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This is why the Juncker Commission is aiming to unlock the full potential of the Single Market so that

consumers, investors and businesses can access and offer goods and services for the best quality and

price regardless of national borders.

At the start of the Commission’s mandate, Commissioner Hill was asked in a Mission Letter from

President Juncker to contribute to this political objective. DG FISMA’s contributions broadly fall into

three themes:

Improving financial services for consumers and retail investors;

Fully implementing the new supervisory and resolution rules;

A regulatory framework for a resilient and stable financial services sector.

Improving financial services for consumers and retail investors

In Commissioner Hill’s Mission Letter President Juncker emphasized the importance of ensuring "that

the financial services regulatory framework takes into account the needs and interests of consumers

and retail investors and [proposing] any necessary measures to make financial services work better

for citizens".

Stimulating growth goes hand-in-hand with initiatives and measures to promote consumers' and

investors’ interests as regards financial services. There can be no successful Single Market if only the

concerns and needs of the financial sector are taken into account.

Specific objectives 2.18 and 2.49 aim to make it easier for consumers and retail investors to gain

access to payment systems and funding, but only when these are safe and reliable. Moreover,

consumers should have a greater choice of improved products and services, which in turn increases

the competitiveness of the sector. This applies to both national and cross-border products, as well as

online products and the pan-European Personal Pension. An important aspect of ensuring that these

systems are safe will be to work on measures to reduce the number of cyber breaches in the financial

sector.

Specific objective 2.210 aims to further strengthen intra-EU investor protection, in particular by

ensuring that investment firms act in accordance with the best interests of their clients. Appropriate

disclosure rules are therefore essential. In order to achieve a fair internal market it is important that

investors get all the relevant information and that this information is clear, fair and not misleading.

Furthermore, this specific objective will strengthen legal protection of intra-EU investors. The

financial crisis underscored that investors, and the financial system in general, should not solely rely

on credit ratings and that more competition in the credit rating industry is desirable. This objective

therefore also aims to reduce the reliance on external ratings and create greater diversity and

competition in the credit rating industry.

Specific objective 2.311, will help meet the needs of consumers and investors by ensuring that the

way in which companies report to the public is of a high quality, comparable and transparent and

that the audits of such companies are reliable.

8 Banks and non-banks compete to provide cheap, safe and reliable payment systems and funding to consumers. 9 Consumers have access to safe and reliable insurance, pension, banking and UCITS products and services, both

nationally and across borders. 10 Strengthened legal and investor protection for intra-EU investors and a financial system that is less reliant on

external credit ratings, with greater diversity in the credit rating industry. 11 Financial and non-financial reporting by companies, as well as audit, is of a high quality.

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Fully implementing the new supervisory and resolution rules

President Juncker underlined in both his Political Guidelines and in Commissioner Hill's Mission Letter

that it is of particular importance "to ensure that the Commission remains active and vigilant in

implementing the new supervisory and resolution rules fully, making European banks more robust so

that they can get back to lending to the real economy".

DG FISMA will continue to take decisive steps towards the full implementation of the rules that have

been recently agreed or are still pending adoption, and their enforcement. This is why specific

objective 2.512 focuses on ensuring that the financial regulatory framework is evaluated,

appropriately implemented and enforced across the EU.

There is still a need to act in the area of non-bank resolution and to make further progress on the

Banking Union, which will strengthen Europe’s Economic and Monetary Union. A large number of

implementing measures will be adopted through a sound and transparent process which will benefit

from the work of the ESAs.

A regulatory framework for a resilient and stable financial services sector

A healthy and well-functioning financial system requires safe, stable and resilient financial

institutions that are carefully and responsibly regulated, managed and supervised. Only under thes

conditions can the financial system effectively and efficiently contribute to growth and benefit EU

citizens, companies and society as a whole.

President Juncker gave Commissioner Hill the task of continuing "to put in place a regulatory

framework which ensures the resilience and stability of the financial services sector. Financial

markets and institutions should be appropriately regulated and supervised with, where relevant,

appropriate crisis management tools".

With specific objective 2.613, DG FISMA recognises the essential role that stable, well-regulated

financial markets play in securing economic growth by aiming for financial market infrastructures

that are stable and function effectively.

An important part of the legislation that was passed in the years following the crisis was to make sure

that financial institutions can cope better in the future under adverse conditions and that the failure

of one institution can be isolated to prevent damage to the entire system. This is vital to guarding the

EU’s internal market against systemic crises. The aim of specific objective 2.6 is therefore also to

ensure that financial institutions can absorb losses and liquidity shocks.

Although the acute phase of the financial crisis is over and restoring growth and investment is a new

and urgent priority, significant financial risks remain. It is critical to remain vigilant, keeping stability,

resilience and efficiency high on the DG’s agenda.

As part of the EU’s response to the crisis, systems were put in place to make it easier to monitor the

state of the European financial system. Being vigilant means making sure that any risks to financial

stability are identified and dealt with before they have a chance to snowball. Ensuring that structural

and cyclical macro-prudential risks are proactively addressed is therefore part of this specific

objective.

12 The financial regulatory framework is evaluated, appropriately implemented and enforced across the EU. 13 Financial institutions can absorb losses and liquidity shocks, financial market infrastructures are stable and

function effectively, and structural and cyclical macro-prudential risks are proactively addressed.

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General Objective 3: A Deeper and Fairer Economic and Monetary Union.

During the financial crisis, Member States tried to address the systemic fragility of their banking

systems through national policy tools, but it became clear that, for those countries that shared a

currency and were therefore more interdependent, more had to be done.

The Banking Union was conceived to ensure that banks are stronger and better supervised and,

should problems arise in the financial sector, that they can be resolved more easily and without using

taxpayers' money. It is made up of the Single Supervisory Mechanism (SSM), which became

operational in 2014, and the Single Resolution Mechanism (SRM), which became operational in 2016.

The Five Presidents’ Report, published in 2015, set out a plan for strengthening Europe's Economic

and Monetary Union. The report proposed concrete measures to deepen the Economic and

Monetary Union (EMU) and complete it by 2025.

A single banking system is the mirror image of a single currency. Since the vast majority of money

exists in the form of bank deposits, a currency can only be truly single if confidence in the safety of

bank deposits is the same irrespective of the Member State in which a bank operates. This requires

single bank supervision, single bank resolution and single deposit insurance. This is crucial to address

the bank-sovereign negative feedback loops which were at the heart of the crisis.

As the lead service in exercising the Commission's function as resolution authority, DG FISMA ensures

that any bank resolution safeguards financial stability, in particular by preventing contagion and

maintaining market discipline via the bail-in rules. Moreover, the DG ensures that public financial

support and the cost of resolution are minimised while depositors, client funds and assets which are

held by banks are protected. Specific objectives 3.114 and 3.215 therefore aim to ensure that the

market exit of a non-major financial institution has a limited economic impact in the euro area and to

reduce risk in the banking sector, preserving the Economic and Monetary Union.

One of the measures put forward as a result of the Five Presidents’ Report is the European Deposit

Insurance Scheme (EDIS), which was then adopted by the College in 2015. EDIS will be the third pillar

of a full-fledged Banking Union alongside bank supervision and resolution. As the current set-up with

national deposit guarantee schemes remains vulnerable to large local shocks, common deposit

insurance would buttress resilience against future crises. A common scheme is also more likely to be

fiscally neutral over time than national deposit guarantee schemes because risks are spread more

widely and because private contributions are raised over a much larger pool of financial institutions.

DG FISMA will play a leading role in making EDIS a reality.

Risk-sharing must be accompanied by risk-reducing measures. FISMA is committed to reducing risks

further and ensuring a level playing field in the Banking Union by weakening the link between banks

and their national sovereigns. In terms of specific risk reduction measures, it is important to restate

the importance of implementing agreed measures. DG FISMA will in particular ensure that the

remaining elements of the regulatory framework agreed at international level are implemented and

that existing legislation is fully transposed by Member States.

14 The market exit of a non-major financial institution has a limited economic impact in the euro area. 15 Risk in the banking sector is reduced.

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General objective 1: A New Boost for Jobs, Growth and Investment.

Impact indicator: Employment rate population aged 20-64 Source of the data: Eurostat

Baseline

2014

Target (2020) Europe 2020 target

69.2% At least 75%

Planned evaluations: None planned.

Specific objective 1.1: Companies raise more equity in public and private

capital markets.

Related to spending programme(s)

No

Result indicator: Public equity: new equity issuance year-on-year growth.

Source of data: European Central Bank, Data Warehouse.

Baseline

2014 Average

Interim Milestones Target

2020 2015 2016

4% 4.5% 5% 5.5%


Result indicator: Private equity activity, gross annual flows.

Source of data: EVCA - gross annual flows (for private equity data)

http://www.investeurope.eu/media/386098/Yearbook-2015-Europe-Country-tables-Public-version-FINAL.xlsx

Baseline

End 2014


2017 2015 2016

EUR 44.6bn 1.9% 2% 2.1% (in line with European

Commission's economic forecast for

the EU).


Result indicator: Number of prospectuses approved for equity and/or admissions to trading/amount of capital raised

under these prospectuses.

Source of data: Report from the European Securities Markets Authority (ESMA) on prospectuses as per Art 43 of the

Prospectus Directive.

Baseline

2014

Target

2019: The Prospectus Regulation will enter into force in 2017-18. Therefore,

DG FISMA will be able to monitor its effects as of 2019.

3,765 The result of reduced administrative burdens in the revised Prospectus

legislation should lead to an increase in the number of approved

prospectuses.


Specific objective 1.2: Debt funding for the corporate sector, in particular for

SMEs, is more diversified.


No

Result indicator: Share of market funding in total outstanding debt.

Source of data: ECB Statistical Data Warehouse.

Baseline

2014 Average


2019 2015 2016 2017 2018

16.3% 16.6% 16.9% 17.2% 17.5% 17.8%


Result indicator: Public debt: New issuance in debt securities, year-on-year growth.

Source of data: European Central Bank data – Statistical Data Warehouse.

Baseline Interim Milestones Target

12

2014 Average 2015 2016 2017 2018 2019

8.6% 5% 5% 5% 5% 5%


Result indicator: Financing gap to SMEs, i.e. difference between the need for external funds and the availability of

funds.

Source of data: European Commission / European Central Bank SAFE Survey (data coverage limited to the euro area).

Baseline

End 2014


2019 2015 2016 2017 2018

13% <13% <13% <13% <13% <13%


Specific objective 1.3: Access to funding for SMEs is less fragmented. Related to spending programme(s)

No

Result indicator: Dispersion in bank loan rejection rate: best performing versus worst performing Member State.

Source of data: European Commission / European Central Bank SAFE Survey (data coverage limited to the euro area).

Baseline

End 2014


2019 2017

39 percentage

points

<39 percentage points <39 percentage points (The dispersion in bank loan

rejection rate should decrease, i.e. access to funding

by SMEs should become more equal).


Specific objective 1.4: Banks, insurance companies and pension funds have

greater incentive to invest in and lend to the real economy in a sustainable

way, including investing in long-term European projects.


No

Result indicator: Insurance companies' investments in infrastructure.

Source of data: European Insurance and Occupational Pensions Authority (EIOPA) as of mid-2016.

Baseline

mid-2015

Before the

adoption of a

Solvency II

amendment on

infrastructure.

Interim Milestone Target

2019 2018

No quantitative

data available at

this point. EIOPA

can provide data as

of mid-2016.

A first increase. A general increase in insurance

companies' investment in

infrastructure by 2019.

Planned evaluations: The 2018 review of the standard formula will allow an interim assessment of the effect of the

2015 amendment.

Result indicator: Insurance companies' investments in STS securitisation products.

Source of data: European Insurance and Occupational Pensions Authority (EIOPA) as of mid-2016.

Baseline

End 2015

Before the

adoption of a

Solvency II

amendment on

securitisation.


2019 2018

13

No quantitative

data available at

this point. EIOPA

can provide data as

of mid-2016.

A first increase. An increase in insurance companies'

investments in STS securitisation

products.


2016 amendment.

Result indicator: Total assets under management by pension funds.

Source of data: EIOPA Pensions Database; OECD.

Baseline

2016

Entry into force of

IORP II.


2020 2019

According to

EIOPA, in 2014 the

assets of the

occupational

pension fund

sector in the EU

totalled EUR 3.2

trillion.

Increase from the baseline, one year after the

transposition deadline.

Growth in pension assets (especially

for the lower ranking countries in

terms of pension assets).

Planned evaluations: Review of the IORP II Directive and EIOPA annual reports.

Result indicator: Annual change to the share of total loans to non-financial counterparties to GDP (percentage point

difference).

Source of data: European Central Bank Statistical Data Warehouse.

Baseline

End 2008-2012


2019 2015 2016 2017 2018

Pre-crisis period

was marked by

excessive credit

growth as

compared with

GDP from 164% in

2006-Q2 to 208%

in 2009-Q2. Banks

have then

substantially

deleveraged until

now, reaching

166% in 2015-Q2.

Annual

change

within the

limits of +/-

5% points.

Annual

change

within the

limits of +/-

5% points.

Annual

change

within the

limits of +/-

5% points.

Annual

change

within the

limits of +/-

5% points.

Annual change within the limits of

+/- 5% points.


Result indicator: Percentage of non-performing bank loans to all loans.

Source of data: European Banking Authority (EBA) risk assessment studies; ECB (Gross non-performing debt

instruments).

Baseline

2014


2019 2015 2016 2017 2018

6.14% <7% <7% <7% <7% <7% (NPL ratio below 7% thresholds)


Result indicator: Maturity of corporate loans granted by banks/maturity of corporate bonds bought by financial

institutions (to capture the long-term investment aspect).

Source of data: European Central Bank data for bank credit (outstanding amount of NFC loans with maturity over 1

14

year divided by the total lending to NFCs); financial accounts for market-based funding.

Baseline

End 2014


2019 2015 2016 2017 2018

For bank lending to

corporates:

74.8%

For corporate

issuance: 94.84%

For bank

lending to

corporates:

>74,8%

For

corporate

issuance:

>90%

For bank

lending to

corporates:

>74,8%

For

corporate

issuance:

>90%

For bank

lending to

corporates:

>74,8%

For

corporate

issuance:

>90%

For bank

lending to

corporates:

>74,8%

For

corporate

issuance:

>90%

For bank lending to corporates:

>74,8%

For corporate issuance:

>90%

(The total value of long-term loans

granted by banks (maturity > 1 year)

to short-term loans (maturity < 1

year) of loans granted by banks and

the maturity of bonds bought by

financial institutions should

increase. The total amount of bonds

issued by non-financial corporates

having a maturity longer than 1 year

to the total amount of bonds issued

by non-financial corporates having a

maturity longer than 1 year should

increase.)


Specific objective 1.5: Barriers to the free movement of capital are identified

and eliminated.


No

Result indicator: Ratio between number of barriers to free movement of capital identified and number of barriers lifted

or alleviated OR voluntary commitments to eliminate or alleviate barriers obtained from Member States.

Source of data: EC/Member States Expert Group on removing barriers to Free Movement of Capital.

Baseline

2015


2019 End 2016

The Economic and

Financial

Committee

endorsed the idea

of setting up a

collaborative

process between

the Commission

and the Member

States in order to

map and tackle

remaining barriers

to free movement

of capital. The

group has started

its work in October

2015 and the

baseline scenario

will be provided as

soon as the

mapping of

Complete inventory of barriers. The target is to lift or alleviate as

many barriers as possible. The target

cannot be quantified until the

mapping exercise is completed. The

removal off such barriers is expected

to have a positive effect on the free

movement of capital between

Member States.

15

existing barriers is

completed.


Specific objective 1.6: An increased cross-border investment flow. Related to spending programme(s)

No

Result indicator: Average of inward and outward intra-EU foreign direct investment (FDI) flows divided by GDP.

Source of data: Eurostat: Balance of Payments, European Union direct investments [bop_fdi6] and GDP and main

components (output, expenditure and income) [nama_10_gdp].

Baseline

2013


2018

A higher index indicates higher new

cross-border direct investment

during the period in relation to the

size of the economy as measured by

GDP. If this index increases over

time, intra-EU direct investment is

becoming more integrated.

2016

2% Stable increase. Stable increase.


Result indicator: Intra-EU portfolio investment (equity and debt) flows divided by GDP.

Source of data: Eurostat: European Union and euro area balance of payments - quarterly data (BPM6) [bop_eu6_q] and

GDP and main components (output, expenditure and income) [nama_10_gdp].

Baseline

2014


2019

A higher index indicates higher new

cross-border portfolio (equity and

debt) investment during the period

in relation to the size of the

economy as measured by GDP. If

this index increases over time, intra-

EU portfolio investment is becoming

more integrated.

2016

4% Stable increase. Stable increase.


General objective 2: A Deeper and Fairer Internal Market with a Strengthened

Industrial Base.

Impact indicator: Composite indicator of financial integration in Europe (FINTEC) Explanation: The FINTEC indicator is a scale-free measure normalized to always lie between 0 and 1; 0 means no cross-border integration, 1 means full integration; for the price-based part 1 would mean total absence of any price differentials for comparable money market instruments; for the volume-based part, full integration would mean lack of any home bias on the side of investors. Source of the data: European Central Bank

Baseline

(2014)

Target

2019

0.5/0.3

Increase

16

The first entry is the price-based, the second the volume-

based indicator value.

Planned evaluations: ECB annual report.16

Specific objective 2.1: Banks and non-banks compete to provide cheap, safe

and reliable payment systems and funding to consumers.


No

Result indicator: Number of payment cards issued; number of point of sale (POS) terminals; number of ATMs.

Source of data: ECB Payment Statistics Report.

[An increase in the number of payment cards that have been issued, the number of POS terminals and the number of

ATMs, means that consumers are increasingly using safer and more reliable payment systems. The Payment Services

Directive focuses on electronic payments, which are more cost-efficient than cash and which also stimulate consumption

and economic growth. Consumers will benefit from better protected against fraud and other abuses and payment

incidents, with improved security measures in place. As regards losses that consumers may face, the new rules

streamline and further harmonise the liability rules in case of unauthorised transactions, ensuring enhanced protection

of the legitimate interests of payment users.]

Baseline

2011

The 2013 Study on the Impact of the Payment

Services Directive uses 2011 ECB statistics

Target

2020 review of PSD2

737,705 million cards issued;

9,011 million POS terminals in operation;

437 thousands of ATM terminals.

Increase in the number of cards issued; significant increase in

the number of POS terminals, maintaining or increasing the

number of ATM terminals.

Planned evaluations: 2020 review of PSD2 as per Article 108.

Result indicator: Levels of payment fraud, in particular card payment fraud.

Source of data: European Central Bank and European Banking Authority (EBA).

[The Payment Services Directive increases security for electronic payments and this should reduce the level of fraud and

increase confidence and trust. These strict security requirements for the initiation and processing of electronic

payments, which apply to all payment service providers, including newly regulated payment service providers. This

stricter approach on security should contribute to reducing the risk of fraud for all new and more traditional means of

payment, especially online payments, and to protecting the confidentiality of the user’s financial data.]

Baseline

2013

ECB 4th Report on

Card Fraud


2020 review of PSD2 End 2018

1.44 billion EUR

(the amount of

card fraud in

value).

Stable decrease in card fraud.

New PSD2 payment security measures shall enter into

force by the end of 2018. More comprehensive payment

fraud statistics across all payment instruments should

become available at that time.

Significant decrease in card fraud as

PSD2 increases security of payments

and, to the extent new fraud

statistics cover pre-2018 fraud levels

for other payment instruments,

decrease in these figures, too.

Planned evaluations: 2020 review of PSD2 as per Article 108.

Result indicator: Number of cyber breaches in the financial sector.

Source of data: Symantec.

DG FISMA will promote intelligence sharing and testing so that market operators gain higher resilience to withstand

cyber attacks.

Baseline

2015


2019 Internet Security Threat Report 2017 Internet Security Threat Report by Symantec.

16 Work is underway to replicate this data in-house.

17

Internet Security

Threat Report by

Symantec.

by Symantec.

80 million

identities exposed

in the financial

sector in 2014.

Decrease in cyber breaches. Significant decrease in cyber

breaches.


Result indicator: Number of bank accounts.

Source of data: Commission's review report Payment Accounts Directive.

Baseline

2012


2020

The Commission is tackling financial

exclusion in the EU by providing

every citizen with the right of access

to a basic bank account anywhere in

the EU regardless of their residence

and financial situation. The target

was not quantified.

2019

According to a

World Bank Study,

the number of EU

citizens without a

bank account in

2012 was 56

million.

Stable increase. Significant decrease in the number of

unbanked people in the EU from the

baseline figure.

Planned evaluations: By 18 September 2019, the Commission will submit to the EP and to the Council a report on the

application of the Directive. The report will assess the level of financial exclusion in the EU and the measures taken by

MS to address this issue. In particular, it will intend to estimate/calculate the number of consumers who have opened a

payment account with basic features since the transposition of the Directive.

Specific objective 2.2: Strengthened legal and investor protection for intra-EU

investors and a financial system that is less reliant on external credit ratings,

with greater diversity in the credit rating industry.


No

Result indicator: Number of outstanding intra-EU bilateral investment treaties (BITs).

Source of data: UNCTAD.

Baseline

2015

Target

2019

There are currently 196 outstanding BITs

amongst EU Member States.

The target is to reach 0 outstanding BITs by 2019 (i.e. to terminate

all outstanding BITs). However, this will largely depend on a

forthcoming CJEU judgement regarding the compatibility of BITs

with EU Law as well as on subsequent compliance by Member

States.

Intra-EU BITs confer rights on a bilateral basis to investors from

some Member States only, a lower number of (or no) Intra-EU BITs

would therefore improve the equality between intra-EU investors.


Result indicator: Number of open EU Pilot and ongoing infringement procedures against Member States concerning

intra EU-BITs.

Source of data: EU PILOT/ NIF Database.

Baseline Target

18

2015 2019

There are currently 21 EU Pilot cases open and

5 infringement procedures.

Closure of all Pilots and infringements procedures against 26 MS for

compliance (pre or post CJEU judgement).


Result indicator: Investor confidence index: EU Financial services indicator.

Source of data: European Commission.

Baseline

Average in the

period 2013-2014


2017 2015 2016

13 > 10 on average as long as

the EU is not in economic

recession.

> 10 on average as long as

the EU is not in economic

recession.

> 10 on average as long as the EU is

not in economic recession.


Result indicator: Number of new entrants in credit rating market.

There has been a small but stable increase in the number of new entrants in the CRA market also during the year 2015.

Since the entry into force of CRA3 Regulation in 2013, the increasing number of new entrants has remained stable over

the period 2013-2015. DG FISMA expects this increasing rate to remain stable also in 2016 as the impact of CRA3

regulation on the competition in the credit ratings market has not shown its effects yet (as noted by ESMA in its

Technical Advice on competition, choice and conflicts of interest in the credit rating industry). This expectation is based

on the fact that smaller CRAs and new entrants are gradually starting to rate new asset classes

Source of data:

ESMA: list of registered and certified credit rating agencies published at https://www.esma.europa.eu/page/List-

registered-and-certified-CRAs

Baseline

2015


2020 2017 2018 2019

32 CRAs currently

registered or

certified with

ESMA.

Assess number

of new entrants

in the market.

Assess number

of new entrants

in the market.

Assess number

of new entrants

in the market.

Increase the number of registered

and certified CRAs to promote

competitive process.

Result indicator: Market shares for the three largest Credit Rating Agencies.

The indicator monitors the impact of the measures introduced in the CRA 3, with a particular focus on the provisions

contained in Article 8c and 8d on double ratings and the provisions on improving governance and transparency in the

market to assess whether these market shares are being reduced and the other smaller CRAs improve their position in

the ratings market.

Source of data: ESMA: Credit Rating Agencies’ 2014 market share calculations for the purposes of Article 8d of the CRA

Regulation (ESMA/2014/1583).


Baseline

2015


2020 2017 2019

Standard & Poor's

Group: 39.69%

Moody's Group:

34.53%

Fitch Ratings:

16.22%

Assess market shares and

remaining relevant barriers

to entry.

Assess market shares and

remaining relevant barriers

to entry.

Substantial reduction of potential

barriers to entry for smaller CRAs

by 2020. Create market conditions

that would allow them to increase

their market shares, at least in

specific sectors.

https://www.esma.europa.eu/page/List-registered-and-certified-CRAs

https://www.esma.europa.eu/page/List-registered-and-certified-CRAs

19

Total: 90.44%


Result indicator: Qualitative assessment of the regulatory references to the mechanistic use of credit ratings included

in EU legislative acts.

Source of data:

ESMA Technical Advice on reducing sole and mechanistic reliance on external credit ratings (ESMA/2015/1471). Joint

consultation on draft RTS on risk-mitigation techniques for OTC-derivatives contracts not cleared by a CCP

(JC/CP/2014/03).

Baseline

2015


2020 2017 2018

A number of EU legislative

acts contain references to

credit ratings. This includes

CRR and CRD IV, Solvency II

(Delegated Act), UCITIS and

AIFMD (for investment

funds), EMIR and its

Regulatory Technical

Standards (for CCPs). A

qualitative assessment as

regards those references

which incentivise sole and

mechanistic reliance on

credit ratings will be carried

out and a baseline figure

cannot therefore be

provided.

Carry out more In

depth evaluation of

potential

alternatives to

ratings.

Identify references which

are most likely to induce

sole and mechanistic

reliance and for which

deletion is considered

more important.

Elimination of all regulatory

references which incentivise sole

and mechanistic reliance and for

which alternatives were identified

(Art 5c CRA Regulation).


Specific objective 2.3: Financial and non-financial reporting by companies, as

well as audit, is of a high quality.


No

Result indicator: Number of Countries using IFRS.

In 2005 the EU took a significant step and made the use of IFRS obligatory for the consolidated financial statements of

EU companies which are listed on the EU’s stock markets (Regulation 1606/2002). The EU is the largest jurisdiction

applying IFRS.

In relation to listed companies, the Commission’s work extends beyond the EU’s borders and goes towards promoting

the use of IFRS as the worldwide financial reporting language so enhancing the efficiency and transparency of capital

markets throughout the globe.

Source of data: IASB http://www.ifrs.org/Use-around-the-world/Pages/Jurisdiction-profiles.aspx

Baseline

2015

Target

2020

130 countries are currently permitting or requiring

IFRSs for domestic listed companies (last updated

May 2015).

Maintain positive trend.


Result indicator: Number of EU companies disclosing non-financial information in their management report or in a

separate report.

Source of data: Member States, own research (to be determined: no comprehensive, reliable source of information has

20

been identified yet). This would aim at companies included in the scope of the Directive, i.e. large listed companies with

more than 500 employees (plus non-listed companies in the banking and insurance sectors and public-interest entities

designated by Member States).

Baseline

2015


2019 2016

It is estimated that

approximately

2500 EU

companies

currently disclose

non-financial

information.

In line with the baseline. It is estimated that approximately

6000 EU companies should disclose

non-financial information as

requested by the Directive on

disclosure of non-financial

information.

Planned evaluations: The Directive on disclosure of non-financial information includes a review clause to be completed

by December 2018.

Result indicator: Concentration level of audit market players in terms of revenue from statutory audits for Public-

Interest Entities (PIEs).

Source of data: Huber (2011), Reports by national audit authorities and European Competition Network (ECN).

Baseline

2014


2019 2016

The market is

currently very

concentrated, with

the Big Four audit

firms for listed

companies

exceeding 85% of

the market share

in the vast

majority of

Member States.

Reports on developments in the markets for the provision

of statutory audit services to public-interest entities to be

drawn up by 17 June 2016 in accordance with Article 27

of Regulation 537/20014 on statutory audit.

Increase diversity at the top end of

the EU audit market.


Result indicator: Outcome of the quality assurance review of Public Interest Entities (qualitative description of types of

deficiencies and Mitigation/remedies/follow-up).

This indicator will rely on information available to all competent authorities, i.e. results of inspections carried out by

national oversights authorities, which should be reported to the Commission according to Art. 27 Monitoring market

quality and competition of Regulation 537/20014.

Source of data: IFIAR- International Forum of Independent Audit Regulators; Reports by national audit authorities and

European Competition Network (ECN).

Baseline

2014


2020 2016

Inspection reports

indicated

persistent

shortcomings in

audit quality and

that deficiencies in

audit performance

occur too often.

Reports on developments in the markets for the provision

of statutory audit services to public-interest entities to be

drawn up by 17 June 2016 in accordance with Article 27

of Regulation 537/20014 on statutory audit.

Reduction in identified deficiencies.


21

Specific objective 2.4: Consumers have access to safe and reliable insurance,

pension and UCITS products and services, both nationally and across borders.


No

Insurance

Result indicator: The gross written premiums over the GDP.

Source of data: EIOPA combined with national statistics.

Baseline

End 2013


2019 2018

According to the

OECD, insurance

penetration in the

EU (15 countries)

in 2013 was 8.2%

A first increase. General increase.


Pension

Result indicator: The number of consumers investing in personal retirement products across the EU.

Source of data: EIOPA Pensions Database; OECD.

Baseline

End 2015


2019 2018

Current situation. Interim results after implementation of the CMU Action

Plan.

General increase in the number of

EU citizens taking up personal

pension products. Beyond 2019:

should a private pensions initiative

be developed, the number of

persons investing in a pan-European

pension product.

Planned evaluations: CMU Action Plan, EIOPA annual reports.

UCITS

Result indicator: Share of "true" cross-border UCITS funds (i.e. funds sold in at least 5 Member States) with respect to

total number of UCITS funds sold in the EU.

Source of data: Morningstar

Baseline

2015

Target

2018

While the UCITS framework has been an overwhelming success

story, market fragmentation (as evidenced by the large number of

individual funds) is an apparent issue, triggering higher costs and

less choice for investors. The EC will seek to tackle those factors

that hold back cross-border competition, thereby increasing the

number of UCITS distributed on a "true" cross-border basis (i.e.

measured as UCITS being sold in at least 5 different MS).

17.72% Stable increase in the share of true cross-border UCITS funds.

Planned evaluations:

Specific objective 2.5: The financial regulatory framework is evaluated,

appropriately implemented and enforced across the EU.


No

Result indicator: Transposition deficit: Percentage of national implementing measures notified within the regulatory

deadline.

Source of data: NIF Database.

Baseline

2015


2020 2017 2018

22

Only ~30% of the

total number of

national

implementing

measures are

notified within the

regulatory

deadline.

50% 70% Reach between 80 and 100% (all

implementing measures are

notified).


Result indicator: Average time needed to deal with complaints.

Source of data: CHAP Database.

Baseline

2015


2020 2017 2018 2019

The average time

needed to reach a

decision on a

complaint (either

closure or sending

of a letter of

formal notice) is

currently 5.4

months.

Maintain average

<12 months

Maintain average

<12 months

Maintain average

<12 months

The target is to maintain an average

time of <12 months to reach a

decision (as per Secretariat-General

Benchmark).


Result indicator: Share of infringements for non-communication of transposition of Directives dealt with within the

benchmark.


Baseline

2015


2019 2017 2018

Non-

Communication

cases are

considered to be

beyond

benchmark when

more than 12

months elapses

since a letter of

formal notice is

sent and the case

is not yet closed or

sent to CJEU.

Currently 12% of

cases are

considered to be

dealt with within

benchmark.

30% 40% The target is to reach 50% of cases

dealt with within the benchmark.


Result indicator: Number of infringements for non-conformity closed within benchmarks.


Baseline

2015


2020 2017 2018

23

No specific

benchmark is set

for the non-

conformity

assessment.

However, a three-

year benchmark is

set for all Article

258 TFEU

infringements.

There are currently

14 cases still open

>3 years since their

registration.

10 5 No cases open three years after their

registration by 2020.


Specific objective 2.6: Financial institutions can absorb losses and liquidity

shocks, financial market infrastructures are stable and function effectively,

and structural and cyclical macro-prudential risks are proactively addressed.


No

Insurance companies

Result indicator: The proportion of the insurance sector, in terms of assets, which comply with the solvency capital

requirements.

Source of data: Solvency II reporting / EIOPA.

Baseline

Early 2016


2019 2017

First set of data

based on Solvency

II available.

End of the transitional period to comply with the solvency

capital requirement (Art. 308b(14)) of Directive

2009/138/EC).

Near 100% compliance.


2015 amendment.

Banks

Result indicator: Average CET1 capital levels in EU banks.

Explanation: The amount of CET1 capital held by banks should be above the minimum regulatory capital, but this

cannot be guaranteed in the crisis situations where the levels of CET 1 may go below the minimum requirements. The

effectiveness of supervisors also means that banks should hold extra CET1 capital to cover additional risks (Pillar 2

buffer) in order to cover banks risks not covered by the minimum regulatory requirements. However, a fast increase in

the capital ratios, unless new equity is raised in the markets, in short term may reduce lending to the economy in the

short-term and thus is not desirable.

Source of data: Semi-annual EBA Basel III monitoring reports.

Baseline

End 2014


2019 2016 2017 2018

End 2011: 6.9%

End 2012: 8.4

>8.125% >8.75 % >9.375% >10%


Result indicator: Average leverage ratio in EU banks.

Complemented by the capital ratios, the leverage ratio provides a better picture of bank resilience to crisis events. The

target will have to be reviewed at the end of 2016 on the basis of the analysis made by the European Commission.

Source of data: Semi-annual the EBA Basel III monitoring reports.

24

Baseline


2019 2016 2017 2018

End 2011: 2.9%

End 2012: 2.9%

>3% >3% >3% >3%


Result indicator: Average TLAC in G-SIBs.

The Financial Stability Board (FSB) on 9 November 2016 issued the final Total Loss-Absorbing Capacity (TLAC) standard

for global systemically important banks (G-SIBs). The TLAC standard has been designed so that failing G-SIBs will have

sufficient loss-absorbing and recapitalisation capacity available in resolution for authorities to implement an orderly

resolution that minimises impacts on financial stability, maintains the continuity of critical functions, and avoids

exposing public funds to loss.


Baseline

End 2014


202017 2019

Unknown > 16% >18%


Result indicator: Probability of simultaneous default by two or more large and complex banking groups.

Source of data: ESRB Risk Dashboard: Daily, EU (changing composition), Simultaneous default of two or more large

banks, Probability - RDF.D.D0.Z0Z.4F.EC.DFTLB.PR

Baseline

Range 2010-2014


2019 2015 2016

7% <5% in normal times

<20% in stress times

<5% in normal times


<5% in normal times



Financial market infrastructures

Result indicator: Percentage of settlement fails (weighted average by settlement volume).

Source of data: European Securities Markets Authority (ESMA) will report on the number of settlement fails (legal

requirement in CSDR).

Baseline

2012

Target

2020

1.09%. Source of this baseline is the European CDS

Association. After the technical standards enter into

force and the reporting elements are applicable

(estimated: in 2018) there will be a legal obligation

to report on this indicator.

Downward trend in settlement fails.


Macro-prudential measures

Result indicator: Number of notifications of macro-prudential measures, both in and outside EU Law, with material

effects, implemented by Competent Authorities (micro-prudential authorities of the MS)/Designated Authorities

(macroprudential authorities of the MS).

Source of data: ESRB

Baseline

2015 September

Target

2019

179 measures notified to the ESRB. All mandatory measures notified to the ESRB and

implemented effectively; all measures requiring mandatory

recognition notified and implemented effectively. A positive

17 This will be progress towards a 2022 FSB target.

25

trend versus the baseline of measures implemented, as

warranted by the evolution of macro-prudential risks.


General objective 3: A Deeper and Fairer Economic and Monetary Union.

Impact indicator: Composite Indicator of Systemic Stress (CISS) Explanation: CISS measures the state of instability in the euro area financial system. It comprises 15 mostly market-based financial stress measures split into five categories: financial intermediaries sector, money markets, equity markets, bond markets and foreign exchange markets. It is unit-free and constrained to lie within the interval (0, 1). Source of the data: European Central Bank

Baseline

(Average range 2010-2014)

Target

2020

0.25 in normal times

0.8 in a crisis mode

Stable trend


Specific objective 3.1: The market exit of a non-major financial institution has

a limited economic impact in the euro area.


No

Result indicator: Correlation between sovereign and banking CDS. Synthetic CDS series will be used for the euro area.

Source of data: Data available from Bloomberg: Markit Itraxx senior financial 5-year CDS; Markit Itraxx 5-year SovX for

Western Europe. Data on exit events to be provided by SRB, ESAs.

Baseline

End 2014


2020 2015 2016

0.8 0.7 0.6 0.6

The correlation between bank risk

and sovereign risk should decline,

i.e. bank risks should decouple from

sovereign risks.


Result indicator: The Single Resolution Fund is built and becomes operational according to plan.

Source of data: SRB. If available, data will also be sourced from MS not participating in the Banking Union.

Baseline

End 2014


2018 2016 2017

Tentatively EUR

6.8bn per annum

EUR 6.8bn EUR 13.6bn EUR 20.4bn

Operational as of 1 January 2016

The build-up of the SRF according to

the agreed business plan.


Specific objective 3.2: Risk in the banking sector is reduced. Related to spending programme(s)

No

Result indicator: Banks' contribution to overall systemic risk.

Source of data: ECB Statistical Data Warehouse (RDE.D.D0.Z0Z.DE.EC.SRCB_COVAR.5P. More details:

http://sdw.ecb.europa.eu/reports.do?node=1000003357

Baseline

2015

Target

2020

The average was approximately 5% Not in excess of 5%

26


Result indicator: Average TLAC in G-SIBs.

The Financial Stability Board (FSB) on 9 November 2016 issued the final Total Loss-Absorbing Capacity (TLAC) standard

for global systemically important banks (G-SIBs). The TLAC standard has been designed so that failing G-SIBs will have

sufficient loss-absorbing and recapitalisation capacity available in resolution for authorities to implement an orderly

resolution that minimises impacts on financial stability, maintains the continuity of critical functions, and avoids

exposing public funds to loss.


Baseline

End 2014


202018 2019

Unknown > 16% >18%


Result indicator: Average CET1 capital levels in EU banks.


Baseline

End 2014


2019 2016 2017 2018

End 2011: 6.9%

End 2012: 8.4

>8.125% >8.75 % >9.375% >10%


Result indicator: Average leverage ratio in EU banks.

Complemented by the capital ratios, the leverage ratio provides a better picture of bank resilience to crisis events. The

target will have to be reviewed at the end of 2016 on the basis of the analysis made by the European Commission.

Source of data: Semi-annual the EBA Basel III monitoring reports.

Baseline


2019 2016 2017 2018

End 2011: 2.9%

End 2012: 2.9%

>3% >3% >3% >3%


18 This will be progress towards a 2022 FSB target.

27

D. Key performance indicators (KPIs)

Under Specific Objective 1.1: Public equity: New equity issuance year-on-year growth.

Under Specific Objective 1.2: Share of market funding in total outstanding debt.

Under Specific Objective 1.4: Insurance companies' investments in infrastructure.

Under Specific Objective 1.6: Average of inward and outward intra-EU foreign direct investment (FDI) flows divided by GDP.

Under Specific Objective 2.5: Number of infringements for non-conformity closed within benchmark.

28

PART 2. Organisational management

A. Human Resource Management

DG FISMA contributes to the implementation of the Commission Working Methods19 and the

corporate Talent Management Strategy fostering:

the effective use of resources for the Commission's priorities and core businesses;

a competent, gender-balanced and engaged staff;

healthy working conditions.

To this end, DG FISMA plans the following priority actions for the period 2016-2020:

increasing female representation in middle management by identifying the needs of women in

AD roles and designing specific support activities in the area of equal opportunities (e.g.

offering ad-hoc coaching and advice; promoting feedback and experience sharing, etc.);

improving staff well-being by collecting their expectations and feedback and offering adequate

activities, including those developed within the "fit@work" programme;

promoting new working methods, networks ( e.g. AST pro network), training ( e.g. 'knowledge

hours' for members of staff to present specific fields of activity) and workshops.

The outcome of the surveys and meetings planned for 2016 will help define additional initiatives for

2017 and beyond.

Objective: The DG effectively deploys its resources in support of the delivery of the Commission's

priorities and core business, has a competent and engaged workforce, which is driven by an effective

and gender-balanced management and which can deploy its full potential within supportive and

healthy working conditions.

Indicator 1: Percentage of female representation in middle management.

Source of data: SEC(2015)336

Baseline:

26% (May 2015)

Target: 2019

35%

Indicator 2: Percentage of staff who feel that the Commission cares about their well-being.

Source of data: Commission Staff Survey.

Baseline :

42% MARKT (2014)

38% ECFIN (2014)

Target: 2020

45% (5 percentage points higher than the average of DG MARKT and DG ECFIN,

10 percentage points higher than the 2014 average for the Commission)

Indicator 3: Staff Engagement Index.

Source of data: Commission Staff Survey.

Baseline:

71% MARKT (2014)

66% ECFIN (2014)

Target: 2020

70% (1.5 percentage point higher than the average of DG MARKT and DG

ECFIN; 5 percentage points higher than the 2014 Commission average)

19 C(2014) 9004.

https://myintracomm.ec.europa.eu/hr_admin/en/fit-at-work/Pages/index.aspx

29

B. Financial Management: Internal control and Risk management

Based on the provisions of the Financial Regulation, the Authorising Officer is responsible for the

implementation of the budget in accordance with the principle of sound financial management and

the requirements of legality and regularity. The Authorising Officer shall put in place an

organisational structure and an internal control system having regard to the risks associated with the

management environment and their cost-effectiveness, and the nature of the actions financed.

In the period 2016-20 DG FISMA will continue to operate in line with the above requirements by

implementing, and if necessary, reinforcing its internal control system to ensure the legality and

regularity of its financial transactions, sound financial management and fraud prevention and

detection.

Overarching objective: The Authorising Officer by Delegation should have reasonable assurance that

resources have been used in accordance with the principles of sound financial management, and that

the control procedures put in place give the necessary guarantees concerning the legality and

regularity of the underlying transactions including prevention, detection, correction and follow-up of

fraud and irregularities.

Objective 1: Effective and reliable internal control system giving the necessary guarantees concerning

the legality and the regularity of the underlying transactions

Indicator 1: Estimated residual error rate.

Source of data: DG FISMA Annual Activity Report.

Baseline Target

2014: < 2 % Below the materiality criteria every year.

Indicator 2: Estimated overall amount at risk for the year for the entire budget under the DGs

responsibility.


Baseline Target

2014: EUR 1.1 million None

Indicator 3: Estimated future corrections.


Baseline Target

2014: EUR 159 852 None

Objective 2: Effective and reliable internal control system in line with sound financial management.

Indicator 1: Conclusion reached on cost effectiveness of controls.


Baseline (year) Target

2014: No20 No

Indicator 2: Overall cost of controls (%) over expenditure to be compared and monitored over the years.

Baseline (year) Target

2014 estimation: 4.7% None

20 However, effectiveness and efficiency indicators and costs are estimated for each stage and category of

expenditure, and where applicable are compared to data from previous years.

30

Objective 3: Minimisation of the risk of fraud through application of effective anti-fraud measures,

integrated in all activities of DG FISMA, based on the DG's anti-fraud strategy (AFS) aimed at the

prevention, detection and reparation of fraud.

Indicator 1: Updated anti-fraud strategy of DG FISMA, elaborated on the basis of the methodology

provided by OLAF.


Baseline Interim Milestone Target

December 2013. 2016-First update of the AFS Update of the AFS every 3 years, as set out

in the AFS.

C. Better Regulation (only for DGs managing regulatory acquis)

The DG will deliver on these objectives two ways: First, in the short term, two REFIT items (the

Financial Conglomerates Directive, the Motor Insurance Directive) have already been identified and

will figure in the AMP 2016. Second, in the medium term, the DG has launched a public consultation

(Call for evidence) on 30 September 2015 which closes on 29 January 2016 to identify inter alia gaps

and inconsistencies of the existing financial acquis. To the extent that such gaps and inconsistencies

are identified, they could trigger additional REFIT exercises in the period 2017-2020. The DG will

extensively rely on its internal economic analysis and evaluation capacity to implement BR in both

cases. On particular topics that require specific knowledge of industry structure, business models, or

technology being used, external studies will continue to complement the internal analysis and

evaluation work.

Objective: Prepare new policy initiatives and manage the EU's acquis in line with better regulation

practices to ensure that EU policy objectives are achieved effectively and efficiently.

Indicator 1: Percentage of Impact assessments submitted by DG FISMA to the Regulatory Scrutiny Board

that received a favourable opinion on first submission.

Explanation: The opinion of the RSB will take into account the better regulation practices followed for new

policy initiatives. Gradual improvement of the percentage of positive opinions on first submission is an

indicator of progress made by the DG in applying better regulation practices.

Source of data: DG FISMA.

Baseline 2015 Interim Milestone 2016 Target 2020

83% (68% = Commission average in 2014) on

first submission (68% = Commission average

in 2014).

Positive trend compared to

baseline


interim milestone.

Indicator 2: Percentage of the DG's primary regulatory acquis covered by retrospective evaluation findings

and Fitness Checks not older than five years.

Explanation: Better Regulation principles foresee that regulatory acquis is evaluated at regular intervals.

As evaluations help to identify any burdens, implementation problems, and the extent to which objectives

have been achieved, the availability of performance feedback is a prerequisite to introduce corrective

measures allowing the acquis to stay fit for purpose.

Relevance of Indicator 2: The application of better regulation practices would progressively lead to the

stock of legislative acquis covered by regular evaluations to increase.

31

Source of data: DG FISMA.

Baseline 2015 Interim Milestone 2016 Target 2020

DG FISMA conducted 15 retrospective

reviews and 2 green papers in 2015. 10

retrospective reviews have been adopted to

date. As Better Regulation principles came

into force only late May 2015 (with a

transition period for full application at the

end of 2015), only 1 DG FISMA review

qualified as "evaluation" according to the

Better Regulation Principles.


baseline


interim milestone

D. Information management aspects

DG FISMA ensures that documents and information are managed in compliance with e-Domec rules

(Electronic Archiving and Document Management in the European Commission) as defined in the

Commission Decision C(2002)99 on administrative management of documents and its implementing

rules SEC (2009) 1643. In the period 2016-2020, DG FISMA will continue:

To promote the registration of documents in the corporate record system (ARES- Advanced

REcord System) and increasing awareness of data and information management across the

whole DG. This shall contribute to a more performing organisation, which can rely and

exchange with other services relevant information, when needed.

To use BASIS (Briefings And Speeches Information System) to manage requests for briefings,

speeches or any other supporting documentation coming from senior management of the

Commission. This shall ensure more structured information on the request for briefings,

easier follow-up, and an overview of pending workload.

Objective: Information and knowledge in the DG is shared and reusable by other DGs. Important

documents are registered, filed and retrievable.

Indicator 1: Percentage of registered documents that are not filed (ratio)

Source of data: Hermes-Ares-Nomcom (HAN) statistics

Baseline 2014 Target

2014: 1% 1%

Indicator 2: Percentage of HAN files readable/accessible by all units in DG FISMA

Source of data: HAN statistics

Baseline Target

2014: 99% 99%

Indicator 3: Percentage of briefings managed in accordance with a uniform business process and using a

common tool

Source of data: BASIS (Briefings And Speeches Information System) – Re: Briefings at DG and DDG level

only

Baseline Interim Milestone Target

2015: 100% 100% 100% every year

http://www.cc.cec/sg_vista/cgi-bin/repository/getdoc/COMM_PDF_C_2002_0099_F_EN_ACTE1.pdf

http://www.cc.cec/sg_vista/cgi-bin/repository/getdoc/COMM_PDF_SEC_2009_1643_1_EN.pdf

32

E. External communication activities

DG FISMA's communication is mainly directed at the media and stakeholders while contributing to

improving citizens' overall perception of the EU. The DG aims to support the policy process by

explaining the Commission's legislative and other policy initiatives in banking and finance and, where

possible, engage stakeholders in the debate.

Communication will therefore focus on the concrete deliverables set out in this Strategic Plan and in

the Annual Management Plans. Priorities will be set according to the political importance and/or

sensitivity of the deliverables as well as the potential target audience.

As the initiatives are geared respectively to promoting jobs, growth and investment, creating a

deeper and fairer Internal Market and completing Economic and Monetary Union, DG FISMA's

communication will always feed into the broader corporate communication around these political

priorities. In particular, the follow-up to the Capital Markets Union action plan as one pillar of the

Investment Plan will feature prominently in communication over the next five years. The same

should apply to further action to build a true internal market for retail financial services.

In this context, DG FISMA will make best possible use of a limited set of communication channels,

including especially press and media work, its website, social media and the Finance Newsletter. DG

FISMA will strive to improve users' satisfaction with these channels.

Objective 1: Citizens perceive that the EU is working to improve their lives and engage with the EU. They

feel that their concerns are taken into consideration in European decision making and they know about

their rights in the EU.

Indicator 1: Percentage of EU citizens having a positive image of the EU.

Definition: Eurobarometer measures the state of public opinion in the EU Member States. This global

indicator is influenced by many factors, including the work of other EU institutions and national

governments, as well as political and economic factors, not just the communication actions of the

Commission. It is relevant as a proxy for the overall perception of the EU citizens. Positive visibility for the

EU is the desirable corporate outcome of Commission communication, even if individual DGs’ actions may

only make a small contribution.

Source of data: Standard Eurobarometer (DG COMM budget).

Baseline: November 2014 Target: 2020

Total "Positive": 39% Neutral: 37 % Total "Negative": 22%

Positive image of the EU ≥ 50%

Objective 2: Higher user satisfaction with DG FISMA's main information channels, i.e. its website,

Finance Newsletter and social media accounts.

Indicator 2: Percentage of users who "totally agree" or "tend to agree" with the statement "The website /

Finance Newsletter / social media accounts improve my understanding of what the EU is doing on banking

and finance."

Definition: This objective covers the DG's main communication channels horizontally across all topics. It

focuses on the quality of their services to the DG’s main target audience, i.e. stakeholders.

Source of data: Online surveys.

33

Baseline Target: 2020

Online survey to be conducted in 2016 to

establish baseline.

+10% (as compared to 2016 baseline).

strategic plan 2016-2020*...1 strategic plan 2016-2020* directorate-general for financial stability,...

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strategic plan 2016-2020...1 strategic plan 2016-2020 directorate-general for financial stability,...