Welcome to the FIG Top 5 at 5

On 10 November 2026, Deputy Governor of the Central Bank of Ireland (“Central Bank”), Vasileios Madouros, delivered a speech (“Speech”) at the European Capital Markets Institute’s annual conference, addressing two interconnected developments that he described as “shaping the future of finance” – tokenisation and the continued expansion of non-bank finance.

Tokenised finance

The Deputy Governor highlighted tokenisation’s potential to deliver faster settlement, reduced counterparty exposure and lower costs, while supporting greater integration of European capital markets. However, he emphasised that technology alone will not deliver these benefits, identifying four foundations needed for tokenisation to scale safely and effectively:

• monetary foundations – central bank money must retain its anchoring role in settlement. The Eurosystem’s Pontes solution and Appia project are advancing this work, alongside steps towards accepting tokenised assets as collateral;
• legal and regulatory clarity – further clarity is needed on matters including on-chain ownership records and smart contracts, without creating legal inconsistencies which could result in fragmentation. From a regulatory perspective, the Deputy Governor highlighted that the guiding principle should be “same activity, same risk, same regulatory outcome”, with existing frameworks adapting where necessary, while avoiding premature prescription. He also referenced the Central Bank’s upcoming tokenisation access point and planned engagement in the form of “time-bound sprints” – for more information see FIG Top 5 at 5 dated 5 November 2026;
• interoperable tokenised deposits – here the Deputy Governor stated that “the private sector in Europe needs to take up the baton and lead” in this area with a focus on “interoperability by design at a pan-European level”; and
• public sector issuance – tokenised sovereign securities could provide high-quality collateral and act as a catalyst for private sector issuance. The Deputy Governor referenced developments, in this area, that have taken place in Slovenia and Luxembourg.

Non-bank finance

The Deputy Governor emphasised that, as non-bank finance expands, it must remain resilient to adverse shocks. He also cautioned that, while tokenisation could improve collateral mobility and liquidity management, it could facilitate higher leverage and accelerate the transmission of liquidity shocks.

The Deputy Governor stated that the frameworks for identifying and addressing vulnerabilities in the non-bank sector need to be improved, and in that regard, he identified three core foundations to achieve this:

• surveillance – assessing whether core markets can continue providing financing under stress, through system-wide analysis and improved data sharing between European authorities;
• regulatory reform – here, the Deputy Governor discussed the implementation of internationally agreed reforms, including Financial Stability Board (“FSB”) recommendations on open-ended funds and non-bank leverage. He also discussed Central Bank work on safeguarding the resilience of non-bank finance – for example the introduction of measures to guard against leverage-related vulnerabilities in liability-driven investment funds and property funds. It was emphasised that regulatory simplification should not prevent frameworks from evolving to address emerging risks; and
• crisis management – the Deputy Governor discussed addressing gaps in powers to deal with failing non-bank payment providers and considered similar questions regarding non-bank stablecoin issuers. He noted the progress in developing crisis management frameworks beyond banks, to also cover insurers and central counterparties. He concluded that potential central bank liquidity facilities for non-banks is something that deserves consideration, but did note that it would involve trade-offs, including moral hazard and risks for central bank balance sheets.

Conclusion

The Deputy Governor concluded with three main messages:

• fragmentation is holding back the potential of Europe’s capital markets – that potential must be unlocked;
• given that tokenisation and non-bank finance are, together, shaping the future of finance, Europe must respond strategically to harness that benefit while ensuring financial stability; and
• foundations allowing for both integration and resilience are needed.

1. Central Bank consults on updates to its implementation notice on options and discretions under CRR and CRD

 

On 9 November 2026, the Central Bank of Ireland (“Central Bank”) published Consultation Paper 174 (“CP174”) on proposed updates to its May 2025 implementation notice (“Proposed Implementation Notice”) on competent authority options and discretions (“O&Ds”) under the Capital Requirements Regulation (“CRR”) and Capital Requirements Directive (“CRD”). The Proposed Implementation Notice sets out the Central Bank’s requirements and guidance on how it exercises certain choices available to competent authorities under the prudential framework.

CP174 comes on foot of revisions to the European Central Bank’s (“ECB”) O&D framework, primarily linked to the legislative changes introduced by CRR III and CRD VI. In particular, the Central Bank is updating its approach to reflect amendments to the ECB’s Recommendation and Guideline on the exercise of O&Ds by national competent authorities in relation to less significant institutions (“LSIs”).

CP174 states that the Implementation Notice applies to the following:

• domestically authorised LSIs within the meaning of the Single Supervisory Mechanism Regulation (“SSMR”), except in cases where the ECB assumes direct supervisory responsibilities under article 6(5)(b) of SSMR;
• where applicable, Irish branches of LSIs authorised in other SSM-participating member states, except in cases where the ECB assumes direct supervisory responsibilities under article 6(5)(b) of SSMR;
• where applicable, Irish branches of credit institutions authorised in European Economic Area (“EEA”) member states not participating in the SSM (and where such branches are not designated as SIs in their own right for SSM purposes under article 6(4) of SSMR or article 6(5)(b) SSMR);
• MiFID investment firms which are in-scope of the CRD Regulations and CRR; and
• Irish branches of non-EEA credit institutions (‘Third Country Branches’) authorised pursuant to section 9A (2) of the Central Bank Act 1971 or, from 11 January 2027 regulation 9K of the CRD Regulations.

Key proposals

Alongside streamlining the 2025 implementation notice and removing its previous section on transitional arrangements, CP174 sets out proposed approaches to certain existing and new O&Ds. Key areas include:

• third-country branches – the Proposed Implementation Notice addresses new CRD VI discretions concerning matters such as authorisation grandfathering, local governance, reporting and requirements to establish a subsidiary. Most would be exercised on a case-by-case basis. However, the Central Bank does not currently intend to require reporting on reverse-solicitation services provided by third-country group entities, or to waive liquidity requirements for qualifying third-country branches;
• retail deposit-taking by third-country branches – following the rescission of its 2016 policy statement on third-country branch authorisation, the Central Bank has incorporated its existing policy position into the Proposed Implementation Notice. It continues generally to expect that prospective third-country branches should not accept retail deposits, given the potential impact of disruption on consumers and confidence in the Irish financial sector;
• proportionality for ESG risk plans – the Proposed Implementation Notice explains that the Central Bank considers its application of the EBA guidelines on the management of ESG Risks to fulfil the requirement for proportionate treatment of small and non-complex institutions, including in relation to the granularity, update frequency, scenarios and metrics used in their plans; and
• EEA branches – the proposed Implementation Notice confirms that the Central Bank intends to exercise its discretion to require periodic reporting on Irish activities by credit institutions established in another Member State with branches in Ireland.

CP174 also addresses the exercise of O&Ds in relation to:

• the area of own funds;
• the risk treatment of exposures secured by immovable property under the standardised approach to credit risk and the IRB approach;
• certain liquidity discretions;
• the area of corporate governance in the CRD Regulations, as well as the interplay between these discretions and the Central Bank’s Corporate Governance Requirements for Credit Institutions 2015 and the Corporate Governance Requirements for Investment Firms and Market Operators 2018;
• certain covered bond discretions; and
• certain large exposure exemptions.

Next steps

CP174 is open for feedback until 1 February 2027. The Central Bank will publish all responses to CP174 on its website.

Matheson insights

Matheson has published a series of insights on CRD VI, available here, here and here.

 

2. Regulations amending 2014 Capital Requirements Regulations are published addressing CCP concentration risk

 

On 6 November 2026, notice of the making of the European Union (Capital Requirements) (Amendment) (No. 2) Regulations 2026 (S.I. No. 562 of 2026) (“Amending Regulations”) was published in Iris Oifigiúil. The Amending Regulations were signed by the Minister for Finance, Simon Harris, on 30 October 2026.

The Amending Regulations give further effect to Directive 2013/36/EU (“CRD”), as amended by Directive (EU) 2024/2994 – which itself amends Directives 2009/65/EC, 2013/36/EU and (EU) 2019/2034 as regards the treatment of concentration risk arising from exposures towards central counterparties (“CCPs”) and of counterparty risk in centrally cleared derivative transactions.

The Amending Regulations amend a number of regulations in the European Union (Capital Requirements) Regulations 2014 (S.I. No. 158 of 2014) (“Principal Regulations”), taking account of the requirements under article 7a of the European Market Infrastructure Regulation (“EMIR”) concerning active accounts, linking institutions’ management of CCP concentration risk and the Central Bank’s related supervisory powers to those requirements. The amended regulations in the Principal Regulations are as follows:

• regulation 61 concerning internal governance and recovery plans;
• regulation 64 regarding the treatment of risks by the risk committee and combined committee;
• regulation 69 dealing with concentration risk; and
• regulation 92 concerning supervisory powers.

Next steps

The Amending Regulations took effect on 30 October 2026.

The Central Bank of Ireland (“Central Bank”) has published a report (“Report”) on its second Innovation Sandbox Programme (“Programme”), which focused on Innovation in Payments. The Programme ran from January to June 2026, with eight participants selected from 38 applications – for more information, see FIG Top 5 at 5 dated 29 January 2026.

The Programme addressed three priority areas:

• frictionless and transparent money movement;
• inclusive access to the digital economy; and
• the safe integration of emerging payment technologies.

Participants received tailored regulatory advice and support through 66 dedicated support sessions and four thematic modules covering the payments landscape, current and future regulation, artificial intelligence (“AI”) and tokenisation.

Key outcomes and learnings

The Report highlights the following outcomes and learnings:

• safer and more efficient payments – projects advanced instant cross-border transfers and biometric authentication at the point of sale, addressing friction and fraud risks in everyday payments. The Central Bank highlighted the challenge of minimising friction while giving payers sufficient opportunity to pause and confirm that transactions are safe and authorised. The Programme also provided insight into the practical challenges of rolling out account-to-account payments;
• financial inclusion and digital guidance – participants applied AI and open banking to financial guidance for small businesses, while other projects sought to simplify pension contributions, tax rebates and money management, or improve sustainability reporting. The Central Bank identified potential for digital tools to support financial literacy and more informed financial decisions. However, it emphasised the regulatory boundary between information or guidance and activities requiring authorisation, including relevant investment advice, insurance intermediation and credit intermediation; and
• tokenisation in retail banking – participants explored how data tokenisation could help consumers understand how their deposits are directed towards sustainable lending. This raised policy questions, including how existing product disclosure requirements apply to tokenised products.

 

Central Bank’s supervisory and policy approach

The Report explains that the Programme deepened the Central Bank’s understanding of innovative technologies and business models, informing policymaking domestically and at EU level. In particular, the Programme provided access to innovations at an earlier stage than would typically arise through ordinary regulatory engagement, helping identify emerging risks and supervisory questions as technologies mature.

To share these insights internally, the Programme used a cross-divisional “Sandbox Champions” network, including representatives from payments authorisation and supervision, financial integrity, banking supervision, and payment systems policy and oversight. Early product demonstrations enabled these experts to engage directly with participants, with learnings disseminated across the Central Bank.

Next steps

The Central Bank intends to retain the Sandbox Champions network and the combination of in-person and virtual engagement formats for future cohorts. It will also use future programmes to test whether observations from this cohort apply more broadly and continue publishing insights as successive cohorts conclude.

Lat week, Governor Makhlouf announced that the theme of the Central Bank’s third Innovation Sandbox Programme will be “Advancing AI for Consumer Good” – for more information, see FIG Top 5 at 5 dated 5 November 2026.

On 4 November 2026, the European Commission (“Commission”) published its work programme (“Programme”) for 2027.

The Programme sets out the main legislative and non-legislative initiatives that the Commission will focus on in the year ahead, framed by the political guidelines for the Commission’s 2024–2029 mandate and the mission letters sent by President von der Leyen to the Commissioners and by the ideas set out in the 2026 state of the union address – for more information, see FIG Top 5 at 5 dated 17 September 2026. The Programme places particular emphasis on delivering, implementing and enforcing existing policies, together with securing agreement on key proposals already on the table.

Simplification

Continuing the Commission’s focus on simplification, the Programme contains 23 key initiatives, including 10 simplification initiatives. The Commission has already proposed 12 omnibus packages and other simplification measures which, once fully implemented, could generate €22.3 billion in recurring annual administrative cost savings.

The Commission also published its second annual overview report on simplification, implementation and enforcement alongside the Programme, taking stock of progress as regards simpler EU rules and more effective implementation.

Additionally, the Programme sets out plans for a pact against gold-plating, aimed at preventing rules agreed at EU level from becoming more complex when transposed and implemented by member states. In this regard, member states should be transparent about additional national requirements and their impact on businesses and the single market. The proposed pact would also introduce a “review and remove” mechanism, in the context of the European Semester, to address burdens resulting from gold-plating.

Competitiveness

From a financial services perspective, the Programme states that the Commission will put forward proposals to complete the savings and investments union, including a reform of the venture capital framework and a bank competitiveness and simplification package. The Commission will also conduct a mid-term review of the savings and investments union.

The bank competitiveness and simplification package is scheduled for the first quarter of 2027, with the policy objective of completing the banking union. Additionally, an initiative on preventing single market barriers is scheduled for the third quarter of 2027.

As regards the digital euro, the Commission welcomes progress in negotiations and states that it will support the co-legislators’ efforts to reach a swift agreement. The Programme also provides for further assessment of a possible reform of the European sovereign safety net architecture.

Separately, and of interest to the insurance sector, the Commission will launch a climate insurance alliance to address Europe’s climate insurance protection gap and improve risk management across all sectors.

Annexes

The Programme contains four annexes, as follows:

• Annex I: New initiatives – this annex sets out the new initiatives and related policy objectives that the Commission will pursue in 2027. Initiatives with a blue background represent simplification initiatives or those with a strong simplification dimension. From a financial services perspective, the bank competitiveness and simplification package is of particular interest. The timing and other information provided in the annex are indicative and subject to change during the preparatory process;
• Annex II: Priority pending proposals – this annex contains 24 priority entries, several covering multiple proposals. Those of particular interest to the financial services sector include the savings and investments union packages on market integration and supervision, supplementary pensions and information, together with the digital euro proposals. The information package includes the proposed amendments to the Sustainable Finance Disclosure Regulation (“SFDR”) and the Packaged Retail and Insurance-based Investment Products Regulation (“PRIIPs”);
• Annex III: Withdrawals – this annex lists pending legislative proposals which the Commission intends to withdraw within six months. Of particular relevance to financial services are the proposed European Deposit Insurance Scheme (“EDIS”) and Financial Data Access Regulation (“FIDA”). The Commission states that the EDIS proposal has been pending for more than ten years and is to be replaced by proposals on banking competitiveness in the first quarter of 2027. As regards FIDA, the Commission notes that no trilogues have taken place since June 2025 and considers that the file is unlikely to secure support in the Council within a reasonable timeframe. Additionally, the Commission intends to withdraw the proposed Green Claims Directive. While environmental claims governed by financial-services rules were excluded from its scope, the proposal was potentially relevant to other consumer-facing environmental claims made by financial institutions about themselves or their activities; and
• Annex IV: Envisaged repeals – this annex does not contain any measures directly relevant to financial services.

Welcoming the publication of the Programme, President von der Leyen stated:

“We are equipping Europe for the challenges to come. Our 2027 work programme sets out ambitious policies to strengthen our Union’s footprint. From deepening the Single Market to expanding our global partnerships. With strategic, streamlined policies, we will keep building a strong, independent Europe. A Europe that delivers for its citizens and businesses.”

1. EBA publishes final methodology and timetable for simplified 2027 EU-wide stress test

 

On 9 November 2026, the European Banking Authority (“EBA”) published the final methodology, draft templates and template guidance for its 2027 EU-wide stress test (“Stress Test”), together with the key milestones for the exercise.

The publication follows the EBA’s June 2026 consultation on the draft package. For more information on the consultation, see FIG Top 5 at 5 dated 18 June 2026.

The Stress Test aims to assess EU banks’ resilience to adverse economic developments, identify potential risks and inform supervisory decisions. It is coordinated by the EBA in cooperation with the European Central Bank, the European Systemic Risk Board and relevant national competent authorities.

Key features

Some of the main features of the Stress Test are as follows:

• reduced reporting burden – the EBA has confirmed a 55% reduction in the number of required data points compared with the previous exercise. This has been achieved by simplifying templates and aligning them more closely with regular supervisory reporting. The change aims to reduce the operational burden on banks while preserving the robustness, risk-sensitivity and comparability of results;
• climate-related risks – for the first time, a dedicated module will assess both physical risks and risks associated with the transition to a lower-carbon economy. Importantly, this assessment will not affect the core Stress Test results; and
• further adjustments – although the methodology is final, the draft templates and guidance may undergo minor technical adjustments before the exercise formally begins.

Next steps

The Stress Test will formally start at the end of January 2027, following publication of the macroeconomic and climate scenarios. Banks’ first and second submissions to the EBA are scheduled for the end of April and May 2027 respectively, with final submissions due in early July. Results are scheduled for publication by the end of July 2027.

 

2. EBA publishes revised guidelines on internal governance under CRD

 

On 5 November 2026, the European Banking Authority (“EBA”) published its final report (“Report”) on revised guidelines (“Guidelines”) on internal governance under the Capital Requirements Directive (“CRD”). The Guidelines reflect changes introduced by CRD VI and aim to strengthen proportionality and reduce unnecessary compliance burdens, while maintaining robust governance across the EU banking sector.

The EBA consulted on the Guidelines in August 2025 – the revisions address, amongst other matters, governance requirements for third-country branches, the mapping of roles and duties, alignment with DORA, and diversity and inclusion. For more information, see FIG Top 5 at 5 dated 21 August 2025.

Key changes following consultation

The EBA has taken account of consultation feedback and targeted stakeholder engagement. Compared with the consultation proposals, the main changes are as follows:

• mapping of duties and individual statements – the Guidelines reduce the level of detail required. The mapping should be proportionate to the institution’s size, nature, organisational structure and complexity and allow gaps in responsibilities to be identified. Individual statements are required for members of the management body in its management function, senior management and key function holders. These should be concise but sufficiently detailed, kept up to date and signed by the relevant individual. An optional template is included in the annex;
• third-country branches – the Guidelines introduce greater proportionality, taking account of branches’ specific characteristics and their classification as class 1 or class 2. For example, class 1 branches may establish, or be required by competent authorities to establish, a local management committee, rather than this being a blanket requirement. Branches must retain sufficient substance and should not become “empty shells” or “letter-box entities”;
• conflicts of interest – the provisions have been clarified and simplified, including those addressing the combination of chair and executive functions and the management of potential conflicts where a former CEO becomes chair within the same entity; and
• diversity and inclusion – the Guidelines reduce the granularity of monitoring requirements, while retaining expectations regarding equality, gender-neutral policies and the monitoring of gender representation and equal treatment.

Next steps

The Guidelines will apply two months after publication in all EU official languages. The Guidelines will repeal the EBA guidelines on internal governance of 2 July 2021.

 

3. EBA outlines next steps on CRR supervisory reporting simplification and extends implementation timelines

 

On 6 November 2026, the European Banking Authority (“EBA”) published an update (“Update”) on its supervisory reporting simplification package, confirming further simplification measures and longer implementation timelines following consultation feedback – for more information on the consultations, see FIG Top 5 at 5 dated 16 April 2026.

Extended implementation timelines

The first reporting reference date for the new requirements has been postponed from 30 September 2027 to December 2027. Selected reporting areas, including liquidity, asset encumbrance, supervisory benchmarking and environmental, social and governance (“ESG”) reporting, will be deferred to December 2028. The EBA has stated that institutions will benefit from at least a one-year implementation period, with longer periods for selected reporting areas.

Further simplification

Following engagement with industry and consideration of consultation responses, the EBA has further refined the package. Key changes include:

• further reductions in reporting requirements, including collateral, stress-testing and ESG-related reporting, together with reduced reporting frequencies and closer alignment with disclosure requirements;
• substantial streamlining of IFRS 9 benchmarking reporting, with a stronger focus on consolidated-level reporting; and
• simpler operational risk loss reporting and a dedicated stress-testing reporting module with separate submission timelines and frequencies.

Reducing duplication

Beyond the EBA reporting framework, the EBA explains that members of its Board of Supervisors have committed to reducing overlapping national and supervisory data requests where equivalent information is already collected under that framework. The EBA acknowledges, however, that supervisors may need access to other data to perform their tasks.

Further initiatives include guidelines on supervisory and resolution data requests, expected by the end of 2026, and an EU-wide public repository of such requests, expected to become operational in Q1 2027. These measures aim to improve coordination, reduce duplication and provide greater visibility over reporting demands.

Next steps

The EBA will publish its final report on the draft implementing technical standards in December 2026 and submit it to the European Commission for adoption. The accompanying technical package is expected in early 2027.

The EBA has highlighted that further proposals to strengthen reporting change management will follow in the first half of 2027.