Update on EBA equivalence monitoring

General Information

This document is an update report published in December 2025 by the European Banking Authority (EBA). It concerns the monitoring of regulatory equivalence decisions taken by the European Commission (EC) regarding 26 non-EU jurisdictions. The scope covers developments in regulatory and banking supervision frameworks in these countries, as well as their impact on financial stability, market integrity, investor protection, and the functioning of the European internal market. The report is based on questionnaires sent to non-EU authorities, documentary research, and internal EBA data, without on-site verification. The monitoring excludes aspects related to anti-money laundering and counter-terrorist financing (AML/CFT) and bank resolution, except for mentions of FATF or EU grey lists.

Executive Summary

The report updates the monitoring of regulatory equivalence decisions taken by the European Commission for 26 non-EU jurisdictions, whose initial list dates back to 2014 and was expanded until 2021. Equivalence means that these countries have banking supervision frameworks considered comparable to those of the EU, allowing harmonized regulatory treatment of cross-border exposures. This monitoring is essential to ensure that these frameworks remain aligned with international standards, notably Basel III, and that they ensure financial stability and protection of European markets. The EBA conducted in 2024-2025 a survey among all concerned jurisdictions via a questionnaire targeting regulatory and prudential developments, notably the application of proportionality, capital requirements, and buffers. The confidential report addressed to European institutions presents a thematic comparative analysis and a detailed country review. The report’s limitations include reliance on countries’ self-assessments, absence of on-site verifications, and a cut-off date for data. Future monitoring will depend on findings: absence of issues will lead to periodic surveillance, while significant gaps could trigger additional engagements. The EBA will continue close cooperation with the European Commission and non-EU authorities to ensure the relevance and updating of equivalence decisions.

Context and Objectives

The European Commission, supported by the EBA, is responsible for assessing and monitoring the regulatory and banking supervision frameworks of third countries to decide on their equivalence with those of the EU. This mechanism aims to facilitate international financial relations while protecting the stability of the European financial system. The report responds to the continuous monitoring obligation provided by the CRR regulation, with an update at least every five years. The objective is to identify any significant change in non-EU frameworks that could affect the validity of equivalence decisions. The document also aims to strengthen dialogue with third-country authorities and guide possible corrective actions or future engagements. The stated limitations concern the mainly declarative nature of collected data, absence of on-site audits, and exclusion of AML/CFT and bank resolution aspects.

Summary of Key Points by Theme

Regulatory framework and supervision: The EBA surveyed the 26 jurisdictions on developments in their prudential and supervisory frameworks since their equivalence recognition. The questionnaire focused on the application of international standards, notably Basel III, and on the implementation of capital requirements and buffers. Proportionality: The report analyzes the application of the proportionality principle in prudential requirements, assessing whether local adaptations lead to results comparable to those of the EU. Implementation of international standards: Emphasis is placed on the degree of alignment with Basel III standards, particularly capital requirements, buffers, and cooperation between authorities. Monitoring methodology: The EBA adopted a high-level approach, based on a standardized questionnaire and documentary research, without on-site verification. This method aims to identify material changes and detect potential gaps. Analysis by jurisdiction: Each country was subject to a detailed analysis, highlighting sectoral developments, institutional structures, and supervisory practices. These analyses serve as a basis for follow-up recommendations or future engagements. Limitations: The report emphasizes that data rely on self-assessments, with a cut-off date for considered information, and that some areas such as AML/CFT are not covered.

Main Findings and Lessons Learned

Established facts: The European Commission recognized 26 non-EU jurisdictions as equivalent in banking supervision, with the list updated between 2014 and 2021. The EBA collected responses from all these jurisdictions via a questionnaire in 2024-2025. Assumptions: The report relies on the good faith of non-EU authorities’ self-assessments and on reliable public sources. Interpretations: The EBA considers that the majority of jurisdictions maintain a prudential framework aligned with international standards, with proportionate adaptations. However, some differences or developments may justify enhanced monitoring. Uncertainties: The absence of on-site verifications limits certainty on the effective application of rules. Moreover, regulatory changes after the cut-off date are not taken into account. The report does not cover AML/CFT and resolution aspects, which may leave blind spots on the overall robustness of frameworks.

Conclusions and Recommendations

The report concludes that the equivalence framework remains overall relevant for the 26 jurisdictions but emphasizes the need for continuous monitoring to detect any major developments. The EBA recommends distinguishing jurisdictions without major findings, which would be subject to regular periodic surveillance, from those presenting gaps or points of attention likely to lead to enhanced engagements or dialogues with non-EU authorities. The document calls for continued close cooperation between the EBA, the European Commission, and the concerned jurisdictions to ensure regular updating of equivalence decisions. No specific measures are proposed in this report, but the methodological framework and detailed analyses provide a basis for future actions adapted according to findings.