EU Science Hub

Financial Analysis

The JRC provides statistical analyses, computation tools, and modelling support to the Commission services in charge of financial markets regulation, taxation, and competition policies.

Banking regulation and systemic risk

The JRC competences on statistics, econometrics, and modelling have been deployed by the Commission especially for improving prudential regulation for banks and insurances and for tackling systemic financial risk in the context of the Banking Union (BU) agenda. In particular, the JRC provided analyses for strengthening banking regulation in response to the crisis, which were input to the Capital Requirement Directive IV, the Bank Recovery and Resolution Directive, the Deposit Guarantee Scheme Directive, and the EC proposal on a bank structural reform. The JRC is now contributing to the completion of the Banking Union with analyses aimed at the establishment of a European Deposit Insurance Scheme. The workhorse model used for the impact assessment of EC legislative proposals in the field of banking regulation is the SYstemic Model of Banking Originated Losses, SYMBOL, developed by the JRC in cooperation with the Directorate-General Internal Market and Services and academics.

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Banking regulation and systemic risk

Capital Markets and cross-border investments

The JRC also develops original research and support to Commission policy departments in relation to the key priorities specified by the Capital Markets Union (CMU) Action Plan. The CMU aims to tackle investment shortages by increasing and diversifying the funding sources for Europe’s businesses and long-term projects. The free movement of capital, one of the “four freedoms” underlying the European Single Market, is the main factor driving the process of building a CMU. Yet, more research is needed in order to understand bottlenecks and ways forward.

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Capital markets and cross-border investments

Sustainable Finance and Fintech

Together with well-established workstreams such as the ones relating to the BU and the CMU, new activities have recently started at the JRC to support the work of the Commission as a whole on emerging topics such as Sustainable Finance and Fintech. For example, the JRC has carried out a financial impact assessment of the recently proposed EU Sustainability Taxonomy of economic activities, and has started to assess the potential impact of new technologies on the financial system.

To foster cooperation with the academia on all of these topics, the JRC has established the Community of Practice on Financial Research (CoPFiR), which currently comprises 22 European universities and associations of universities. The mission of CoPFiR is to strengthen the relationship between scientists and European policy makers and to promote research on topics linked to Commission’s priorities, by making effective use of existing knowledge, sharing data and methods, and exploiting synergies.

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Sustainable Finance