Full Agreement Deutsch – Understanding the New Framework for EU Financial Supervision

The Full Agreement Deutsch or FAD is a new financial supervision framework that was introduced by the European Union (EU) in 2021. The FAD replaces the existing supervisory framework known as the Single Supervisory Mechanism (SSM), which was introduced in the aftermath of the financial crisis in 2008.

The FAD represents a major shift in the way that financial supervision is conducted within the EU. The new framework is designed to improve the effectiveness of financial supervision by giving greater powers to national authorities and strengthening the role of the European Central Bank (ECB) in overseeing the financial system.

As part of the FAD, the ECB will be responsible for conducting the highest level of supervision for the largest banks in the euro area. This will include carrying out regular stress tests and ensuring that banks are taking appropriate measures to manage risk and comply with regulations.

At the same time, national authorities will be given more responsibility for supervising smaller banks and financial institutions. This means that national regulators will be better placed to monitor the risks associated with their own domestic financial systems and take the necessary actions to mitigate these risks.

The FAD also introduces a new system of cooperation between national authorities and the ECB, known as the Joint Supervisory Teams (JSTs). These teams will be responsible for conducting on-site inspections of banks and other financial institutions, with a particular focus on issues such as governance, risk management, and compliance with regulations.

Overall, the introduction of the FAD represents an important step forward for financial supervision and regulation within the EU. By giving greater powers to national authorities and strengthening the role of the ECB, the new framework should help to ensure that the financial system is more stable, resilient, and transparent, which in turn will help to support economic growth and prosperity within Europe.

In conclusion, the Full Agreement Deutsch represents an important development in the field of financial supervision and regulation within the EU. The new framework is designed to improve the effectiveness of financial supervision by giving greater powers to national authorities and strengthening the role of the ECB in overseeing the financial system. As such, it should help to ensure that the financial system is more stable, resilient, and transparent, which in turn will benefit the European economy as a whole.