Deputy governor of the Bank of Greece, Christina Papaconstantinou, discussed the implementation status of key regulatory texts and the lessons learnt from their enforcement so far in a recent speech.
In the backdrop are calls for “simplification” and the “easing” of regulatory burden. At the same time, “deregulation” is being brought up more often. What financial institutions really need the most, in this era of significant digital transformation, economic uncertainty and geopolitical tensions, is stability and convergence, she noted, adding that regulatory texts that bring legal certainty, ensure a level playing field across the EU and aim to manage risks while promoting innovation are of paramount importance.
Among these, she updated on Digital Operational Resilience Act (DORA), Markets in Crypto Assets (MiCA) Regulation, Basel IV, Genius Act and the AI Act.
On DORA, Papaconstantinou highlighted: a divergence in the institutions’ maturity levels; uneven operational mapping; ICT third-party risk management is currently the heaviest lift; major incident management still needs sharper reactions; Resilience testing must also mature from ad-hoc penetration tests to risk-based annual programs.
On MiCA, she identified two key concerns that have emerged, the first relates to multi-issuance schemes, meaning fully fungible stablecoins issued jointly by EU and third-country entities and the second related to the interplay between MiCA and the revised Payment Services Directive (or PSD2).
The Genius Act in the US meanwhile advances federal stablecoin legislation, but with a narrower scope than MiCA, covering only payment stablecoins: “To safeguard European interests, it will be essential to close interpretation gaps in MiCAR, promote euro-denominated alternatives, accelerate progress towards the digital euro and develop DLT-based settlement solutions. Identifying potential future adjustments to MiCAR will also be key to ensuring a level playing field with issuers in other jurisdictions while effectively managing risks,” she said.
On the AI Act, Papaconstantinou said that success “will rely on close cooperation among authorities, sufficient technical expertise and a balanced approach that fosters innovation while upholding trust and accountability in the use of AI across critical sectors”.
On Basel IV, she noted that the EU Council and the European Parliament have recently reached an agreement on the Crisis Management and Deposit Insurance (CMDI) framework: “This will mark a significant improvement in the EU framework for managing the failure of banks,” she said.