EBA Day on Consumer Protection

On 25 October 2012, the European Banking Authority (EBA) held its first Day on Consumer Protection gathering 135 representatives of the banking industry, national supervisory authorities, consumer organisations and academia. This conference provided an opportunity and stimulating forum to present issues related to consumer protection and financial innovation at the European level and to foster discussion on the evolving challenges facing the banking sector.

After the opening remarks by the Chairperson of the EBA, Andrea Enria, and a keynote speech by Jean-Yves Muylle from the European Commission, the discussion was structured around three panels, each one focussing on a key consumer protection topic. The meeting closed with concluding remarks by the Executive Director of the EBA, Adam Farkas.

Panel 1: Consumer Indebtedness

The first panel discussion focused on the issue of consumer indebtedness and over-indebtedness and namely on the following aspects:

• Causes of over-indebtedness
• Mandatory disclosure
• Responsible lending
• Role of the EBA
• Financial literacy
• Role of insolvency and debt-repayment schemes

Some of the issues highlighted during the EBA Day on Consumer Protection in relation to consumer indebtedness will be covered by the EBA guidelines on responsible lending and the guidelines on the treatment of borrowers in payment difficulties which are expected to go out for consultation in the second half of 2013.

Panel 2: Retailisation of Complex Financial Products

The second panel discussion focused on the issue of retailisation of complex financial products and namely on the following aspects:

• Balance between the financial regulation and financial innovation
• Competition and efficiency
• Ensuring that complex financial products are sold safely

In the area of retailisation, the EBA is currently working closely with ESMA to cover all angles of this topic. A joint warning on contracts for difference is expected to be published to warn retail investors as well as a  good practices note on Exchange Traded Funds (ETFs).

Panel 3: Consumer Trends in the EU Retail Banking

The third panel focused on consumer trends in EU retail banking and namely on the following aspects:

• Consumer representation
• The role and nature of regulation
• Responsible lending
• Banking culture and trust
• Role of the EBA
• Changes in the technology

The EBA, in compliance with Article 9 of its founding Regulation, will be collecting and analysing consumer trends also in 2012 (in line with the 2011 consumer trends report) and will be publishing a report at the beginning of 2013.