The European Banking Authority (EBA) was created by Regulation (EU) No 1093/2010 of 24 November 2010 in order to enhance the European System of Financial Supervision of which it is one of the three new supervisory authorities. The EBA is an independent authority of the European Union with legal personality acting in order to ensure efficiency and coherence regarding prudential regulation and supervision in the entire European banking sector. The EBA officially took over the responsibilities and tasks of the Committee of European Banking Supervisors (CEBS) on 1 January 2011.
The EBA is independent but reports to the European Parliament, the European Council and the European Commission.
One of the missions of the EBA is to contribute to the stability and to the efficiency of the financial system in the short, medium and long term:
- by improving the functioning of the internal market using a satisfactory, efficient and consistent level of regulation and supervision;
- by avoiding regulatory arbitrage and by fostering equal conditions of competition;
- by ensuring that credit risk taking or other is correctly regulated and supervised;
- by enhancing consumer protection;
- by ensuring the consistent functioning of the colleges of supervisory authorities, the follow-up, the assessment and the systemic risk measurement, as well as the drawing-up and coordination of rescue plans and deficiency resolutions.
The EBA has therfore the right to gather and exchange information, promote risks assessments as well as make and coordinate crisis simulations at EU level in order to assess the resilience of the financial institutions ("stress tests").