European Commission has published new technical guidance on climate proofing of infrastructure projects for the period 2021-2027. The guidance will help integrate climate considerations into future investments and development of infrastructure projects ranging from buildings and network infrastructure to a variety of system and asset constructions.

The guidance sets out common principles and practices for identifying, ranking and managing physical climate risks when planning, developing, executing and monitoring infrastructure projects and programmes. The process is divided into two pillars (mitigation, adaptation) and two phases (screening, detailed analysis).

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) issued their second joint risk assessment report for 2021. The report highlights the increasing vulnerabilities across the financial sector, the rise seen in terms of cyber risk and the materialisation of event-driven risks.

The ESAs advise national competent authorities, financial institutions and market participants to take the following policy actions:

1. financial institutions and supervisors should continue to be prepared for a possible deterioration of asset quality in the financial sector, notwithstanding the improved economic outlook;
2. as the economic environment gradually improves, the focus should shift to allow a proper assessment of the consequences of the pandemic on banks’ lending books, and banks should adequately manage the transition towards the recovery phase;
3. disorderly increases in yields and sudden reversals of risk premia should be closely monitored in terms of their impacts for financial institutions as well as for investors;
4. financial institutions and supervisors should continue to carefully manage their ICT and cyber risks.

IOSCO has published guidance on the regulation and supervision of the use of Artificial Intelligence (AI) and Machine Learning (ML) by intermediaries and asset managers. 

IOSCO proposes six measures for the creation of appropriate regulatory frameworks for the supervision of intermediaries and asset managers who make use of these technologies, and aims to ensure that intermediaries and asset managers have appropriate features in terms of

adequate governance, internal control and supervisory arrangements with respect to the development, testing, use and performance monitoring of AI and ML;
adequate knowledge, skills and experience of personnel to implement, monitor and challenge AI and ML performance;
appropriate development and testing processes to allow firms to identify potential problems before full implementation of AI and ML;
transparency and disclosure to investors, regulators and other stakeholders.