What is the European Banking Authority (EBA)?
The Europeran Banking Authority (EBA) is the regulatory body of the EU that’s responsible for overseeing and enforcing banking rules and stability in the member states. The regulatory body was established in 2011, in response to the 2008 economic crisis that shook the global economy. The EBA now plays an important role in promoting transparency and integrity within Europe’s banking system.
In this blog post, we’ll be talking more about the core responsibilities of the EBA as well as how the regulatory body adjusts its rules with technological developments.
The Legal Foundation
The EBA was established first under the EU Regulation No. 1093/2010. The regulatory body operates as part of the European System of Financial Supervision (ESFS) as well as collaborating with the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA). The communication between these regulatory bodies create a unique set of rules for banks and digital finance platforms. The EBA has the power to overrule national regulators if they fail to properly regulate their banks.
What is the Purpose of the EBA?
The purpose of the EBA is mainly to create a safer environment for banking in the European Union. The regulatory body harmonizes banking regulations in the EU so that member states can be regulated under consistent rules. The EBA helps strengthen the EU’s ability of preventing systemic risks that could hurt the system as a whole. The EBA’s efforts also pulls focus on protecting consumers. One of the most important tasks of the EBA is promoting transparency and data exchanges, which helps gain customers’ trust as well as enabling the sharing of information between regulators and firms more effectively.
The European Banking Authority (EBA) launched its 2025 EU-wide Transparency Exercise in September, 2025 with the aim to enhance transparency and market discipline in the EU financial system. The exercise included data from over 100 major banks operating within the EU.
Core Responsibilities of the EBA
The EBA’s main duty is regulatory consistency. The regulatory body creates technical standards and guidelines using frameworks like the Capital Requirements Regulations (CRR) and Capital Requirements Directive V (CRD V). The EBA also plays a huge role in pushing risk monitoring. The regulatory body conducts assessments to identify vulnerabilities in the banking sector. The EBA also runs stress tests every two years in the EU; the tests are designed with guidance from Basel III and the European Systemic Risk Board (ESRB).
The EBA also deals with AML/CFT oversight, issuing guidelines and coordinating efforts to fight financial crime. It works to protect businesses, while also promoting transparency. The regulatory body should be working tirelessly to make sure the banking practices in the EU are fair and easily understandable. The final duty of the EBA is overseeing international passporting supervision. This act of theirs helps financial firms with operating without a trouble in the EU market.
The EBA’s Special Role in AML and KYC
The EBA is tasked with creating and enforcing anti-money laundering (AML) and Know Your Customer (KYC) requirements in the EU to help banks reach compliance without dealing with financial crime. The guidelines the EBA issues encourage companies to implement a risk based approach, where they can figure out which customers they need to pay more attention to. With the addition of the Anti-Money Laundering Authority (AMLA) in 2025, the EBA will be working together with the authority to make sure AML compliance is reached in the EU.
The EBA also coordinates special forums also known as AML colleges. These forums bring together supervisors from different countries to help them collaborate on major international money laundering cases.
The EBA and the Digital Finance Evolution
The EBA forms how banks and financial institutions are adapting to new technologies while also eliminating risk of crime. Under the Markets in Crypto-Assets Regulation (MiCA), the EBA oversees certain types of crypto asset service providers. The EBA is tasked with making sure these providers are operating safely while protecting consumers in a quickly growing industry like this. The rollout of open banking standards under PSD2 and the upcoming PSD3 is also handled by the EBA. This means that the EBA will continue to help banks in providing secure API access to third-party providers.
Another task of the EBA is promoting the efficient usage of RegTech and AI in both compliance and during overseeing processes. The authority helps encourage companies like yours to implement new technologies which will help with compliance while also underlining the importance of ethical and transparent AI practices.
Stress Testing and Risk Analytics
The EBA uses stress testing and risk analytics to create a safer banking sector in Europe. The usage of these tools helps regulators understand if firms have enough capital buffers to not get affected by potential shocks. These tools are important to determine how banks act during bad economic conditions. Thanks to this process, the EBA can identify weaker banks and help them using corrective measures before the bank’s risks escalate. Stress testing makes sure that banks operating in the EU are aligning themselves with Basel III standards, helping keep global consistency in risk management and more.
Recent Developments (2024–2025)
The EBA has updated ESD governance guidelines to help banks think of environmental, social, and governance considerations when operating and creating risk frameworks. Another area the authority focuses on is the crypto sector. Recently, the EBA joined forces with European Securities and Market Authority (ESMA) to oversee crypto-asset providers according to EBA's Rulebook. Another one of the EBA’s newer projects, the Single Rulebook ensures that banks follow the same standards on capital requirements, risk management, and transparency. This ensures fairness and a level playing field across the single market while strengthening financial stability by closing loopholes that fraudsters or weak institutions might exploit. There is also a central beneficial ownership registry pilot coming, which aims to improve transparency further and prevent money laundering internationally. The EBA is also putting more attention on fintech and challenger banks. The authority is trying to ensure that these innovative companies are meeting regulatory standards while trying something new.
What is the Structure of EBA?
| THE BOARD | ROLES |
|---|---|
| Management Board | The board of directors consists of a chairman and six members elected from the supervisory board, who must act in the interests of the European Union. The board of directors is tasked with bringing the mission and duties into compliance with the legislation, preparing the work program, and approving internal operational decisions. Decisions in the executive board are made by majority vote. |
| Chairperson | The supervisory board elects a chairman to represent EBA. The duties of the presidency, which can be extended once and last for five years, are to prepare the activities of the supervisory board and to chair the audit and committee of European Banking directors meetings. |
| Executive Director | The Executive Director, like the president, is elected by the European Banking Supervisors and is responsible for the management of EBA. It ensures that the annual work program is carried out in accordance with the instructions given by the supervisory board. |
| Joint Board of Appeal | EBA is a common organ of ESMA and EIOPA. It consists of six members tasked with adjudicating appeals against individual decisions of the EBA. They act in accordance with the findings of the Court of Justice of the European Union. Employees of EBA and other institutions affiliated with EBA are banned from the board. |
| Banking Stakeholder Group | The Banking Stakeholder Group helps facilitate consultation with stakeholders on the EBA's binding technical standards, guidelines, and recommendations. It consists of 30 members, and at least four are academy representatives. |
BA vs ESMA vs EIOPA: Who Regulates What in the EU?
There are three main authorities in the European Union that share the financia supervision duties amongst themselves. The European Banking Authority (EBA), based in Paris, works in overseeing banking, crypto and payments. The authority focuses mainly on compliance of CRD/CRR, AML, PSD2/3, and crypto regulations under MiCA. The European Securities and Markets Authority (ESMA) is also based in Paris, regulating securities, markets and investors. The authority focuses mostly on MiFID II, EMIR, SFDR, and credit rating agencies. The last one, the European Insurance and Occupational Pensions Authority (EIOPA) is based in Frankfurt, tasked with supervising insurers and pensions. The authority manages Solvency II, pension frameworks, and industry-wide stress tests. Even though they have their differences, these authorities come together to work on specific issues. They work together by collaborating with the new Anti-Money Laundering Authority (AMLA), participating in the joint ESA committee, and aligning EU regulations with global standards.
| Authority | Full Name | Sector | Main Responsibilities | Headquarters |
| EBA | European Banking Authority | Banking & Payment Services |
Prudential rules for banks and credit institutions - Capital adequacy (CRR/CRD) - AML coordination |
Paris |
| ESMA | European Securities and Markets Authority | Capital Markets & Securities |
Regulation of investment firms, asset managers, CCPs - Supervision of credit rating agencies - Market abuse enforcement |
Paris |
| EIOPA | European Insurance and Occupational Pensions Authority | Insurance & Pensions |
- Solvency II oversight - Conduct supervision of insurers - Consumer protection in pension products |
Frankfurt |
How Does the EBA Differ from the ECB?
Both the European Banking Authority (EBA) and the European Central Bank (ECB) participate in overseeing EU banking. However, they surely have their differences. The EBA focuses more on regulation. The authority sets standards and guidelines that apply in EU member states, and AML guidance as well as crypto oversight under MiCA are included. The ECB has more of a direct supervisory role. The ECB oversees the largest banks within the Eurozone, while also ensuring daily compliance. The EBA influences AML practices indirectly, using their guidance, whereas with the ECB, the enforcement is done using more of a supportive role. The EBA, as we’ve mentioned before, regulates crypto-asset service providers, while the ECB doesn’t involve itself with the crypto space.
FAQ's Blog Post
The EBA is an EU regulatory agency that ensures effective and consistent regulation and supervision across the European banking sector.
It develops regulatory standards, monitors risks and vulnerabilities, and promotes transparency and consumer protection in the banking system.
No, the EBA is independent of the ECB, but both work together on financial stability and supervision within the EU.
The EBA is headquartered in Paris, France, after relocating from London post-Brexit.
The EBA coordinates AML supervision across the EU and issues guidelines to improve financial institutions’ compliance with AML/CFT rules.
The EBA does not directly supervise banks but sets rules and guidelines for national supervisors and EU financial institutions.
EBA guidelines are non-binding but widely adopted supervisory standards designed to ensure regulatory consistency across the EU.
It publishes the EU-wide bank stress test results and maintains the transparency exercise to inform the public about banks’ financial health.
