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The European Banking Authority (EBA) was created in 2011 as an independent authority within the European Union (EU) that is accountable to the EU Parliament and EU Council. Its highest governing committee is the EBA Board of Supervisors, comprising the Heads of the national supervisory authorities in the 28 EU Member States. Its objectives are to maintain financial stability in the EU and to safeguard the integrity, efficiency, and orderly functioning of the banking sector, as well as to work towards the convergence of regulatory and supervisory approaches to financial institutions throughout the EU. Its regulatory remit extends to the prudential regulation and stress-testing of credit institutions, including their recovery and resolution, payment services, electronic money, and anti-money laundering.
The EBA is also mandated to contribute to the protection of consumers and to monitor financial innovation. In the context of the latter, the EBA has assessed a number of digital innovations, such as virtual currencies, the automation of financial advice, and, more recently, innovative uses of consumer data by financial institutions. The EBA assesses the risks and potential benefits of such innovations, with a view to decide, which, if any, regulatory and/or supervisory action is required to ensure that market participants can have confidence in the innovations. The EBA aims to find the appropriate balance between mitigating the risks and allowing market participants to harness the benefits of the innovation.
In order to fulfil the above mandates, the EBA issues binding EU law (so called technical standards), guidelines addressed to financial institutions, and opinions addressed to national authorities and/or the EU Council, Parliament, and Commission. It can also temporarily prohibit financial activities in the European Union and initiate breach of union law investigations.