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Topic: Capital adequacy

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Basel Committee updates FAQs on Basel III definition of capital

The Basel Committee on Banking Supervision (Basel Committee) has published a revised version of its FAQs on the definition of capital. Updated material is marked in italics.‎ In addition, two flowcharts have been added to the annex to the document. The flowcharts are designed to aid understanding of the application of the Basel III transitional … Continue Reading

Basel III monitoring results

The Basel Committee on Banking Supervision (Basel Committee) has published the results of its latest Basel III monitoring exercise based on data as of 31 December 2016. Data has been provided from a total of 200 banks comprising 105 large internationally active banks. The “Group 1 banks” are defined as internationally active banks that have … Continue Reading

Commission adopts Delegated Regulation on waiver of own funds requirements for certain covered bonds under CRR

Article 129(1) of the Capital Requirements Regulation (CRR) grants preferential treatment to covered bonds collateralized by senior units issued by French Fonds Communs de Titrisation or equivalent securitization entities, securitising residential (point (d)) or commercial (point (f)) property exposures, provided that certain conditions are met: they qualify for credit quality step 1 under the credit … Continue Reading

ECON report on draft Regulation amending the CRR

The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published its report on the draft Regulation that amends the Capital Requirements Regulation relating to the introduction of International Financial Reporting Standard 9 (IFRS 9). In a resolution of 6 October 2016, the European Parliament called for a progressive phase-in regime that would mitigate … Continue Reading

ECB guidance on CRR securitisation notifications

The European Central Bank (ECB) has published a letter from Ms Daniele Nouy, Chair of the ECB Supervisory Board, to the management of significant banks. The letter sets out public guidance on how the ECB expects to be notified of transactions which go beyond the contractual obligations of a sponsor institution or an originator institution, … Continue Reading

ESRB annual report 2016

The European Systemic Risk Board (ESRB) has published its annual report for 2016. The report notes that the ESRB continued to identify four main risks to financial stability in the EU, namely: a re-pricing of risk premia in global financial markets; weaknesses in balance sheets of banks, insurers and pension funds; debt sustainability challenges in … Continue Reading

EBA roadmap on monitoring ECAIs

The European Banking Authority (EBA) has published its future work plan on credit assessments issued by External Credit Assessment Institutions (ECAIs). The EBA’s future work on ECAIs will focus on the following: mapping and decision on unsolicited ratings for newly registered or certified ECAIs as well as assessment of ECAIs originally issuing only solicited ratings … Continue Reading

EBA final draft RTS and ITS on authorisation of credit institutions under CRD IV

The European Banking Authority (EBA) has published draft regulatory technical standards (RTS) and draft implementing technical standards (ITS) pursuant to the mandates set out in Articles 8(2) and 8(3) of the Capital Requirements Directive IV. Specifically: the RTS set out the information to be provided in applications for the authorisation of credit institutions. The aim … Continue Reading

Delegated Regulation on RTS further specifying additional objective criteria relating to liquidity coverage for credit institutions

There has been published in the Official Journal of the European Union (OJ), Commission Delegated Regulation (EU) 2017/1230 of 31 May 2017 supplementing the Capital Requirements Regulation with regard to regulatory technical standards further specifying the additional objective criteria for the application of a preferential liquidity outflow or inflow rate for cross-border undrawn credit of … Continue Reading

Commission adopts Implementing Regulation on ITS on supervisory reporting to reflect IFRS 9 changes to FINREP

The European Banking Authority (EBA) has announced that the European Commission (Commission) has adopted the Implementing Act amending Regulation (EU) No 680/2014 (Implementing Technical Standards on Supervisory Reporting) with regard to financial reporting following the changes in the International Accounting Standards (IFRS 9). Publication of the Implementing Act in the Official Journal of the EU … Continue Reading

Capital treatment for simple, transparent and comparable short-term securitisations proposed by Basel Committee

The Basel Committee on Banking Supervision (BCBS) has issued a consultative document, Capital treatment for simple, transparent and comparable short-term securitisations. The consultative document supplements an earlier consultative document that the BCBS co-published with the International Organization of Securities Commissions (Criteria for identifying simple, transparent and comparable short-term securitisations). The consultative document contains additional guidance … Continue Reading

Top 10: EBA’s public hearing on the Prudential Regime for Investment Firms

On 3 July 2017, the European Banking Authority (EBA) held a public hearing in London to update stakeholders on its progress in developing recommendations for the European Commission (the Commission) for a new prudential regime for MiFID investment firms. The EBA’s work on a new prudential regime for investment firms is in response to a … Continue Reading

Basel Committee publishes a report on the implementation of the Basel III reforms

The Basel Committee on Banking Supervision (BCBS) has published a report that is intended to update G20 leaders on progress by its members on implementing the Basel III reforms. The report notes that overall, further progress has been made since last year’s update to the G20 leaders in implementing the Basel III standards in a … Continue Reading

Basel Committee report on range of practices in implementing the countercyclical capital buffer

The Basel Committee on Banking Supervision (Basel Committee) has published a report, Range of practices in implementing the countercyclical capital buffer policy. The primary objective of the countercyclical capital buffer (CCyB) is to build a varying capital buffer that protects the banking sector from periods of excess credit growth that are often associated with the … Continue Reading

EBA to hold a public hearing in July 2017 on possibility of developing new prudential regime for MiFID investment firms

The European Banking Authority (EBA) has announced that it will hold a public hearing on 3 July 2017 at 14:00 UK time to update all relevant stakeholders on the progress made so far on the possibility of developing a new prudential regime for MiFID investment firms.. In particular, the EBA will present the preliminary results … Continue Reading

Commission responds to EBA comments on proposed CRD V Directive and CRR II Regulation

The European Banking Authority (EBA) has published a letter from the Vice-President of the European Commission (Commission), Valdis Dombrovskis, on the proposed Regulation amending the Capital Requirements Regulation (CCR) and the proposed Directive amending the Capital Requirements Directive IV. Mr Dombrovskis comments on the net stable funding ratio (NSFR) and the leverage ratio. In relation … Continue Reading

Basel Committee updates FAQs on Basel III LCR framework

The Basel Committee on Banking Supervision (Basel Committee) has published an updated version of its FAQs on the liquidity coverage ratio (LCR). New FAQs and updates to the previous FAQs published in April 2014 are denoted in italics and consist of: 1(b, d and e), 2, 5, 6 (d and e), 9, 10, 13(i), 15, … Continue Reading

ECON draft report on proposed Regulation amending CRR as regards transitional period for mitigating impact on own funds of introduction of IFRS 9

The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published its draft report on the proposed Regulation amending the Capital Requirements Regulation (CRR) as regards the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment … Continue Reading

EBA updates final guidelines on disclosure requirements for EU banking sector

The European Banking Authority (EBA) has published a final report containing guidelines on disclosure requirements under Part Eight of the Capital Requirements Regulation (CRR). The final guidelines follow an earlier EBA consultation which was published last year (our blog is here) following an update to the Pillar 3 framework by the Basel Committee on Banking … Continue Reading

EBA consults on scope of its draft guidelines on connected clients

The European Banking Authority (EBA) has published a consultation paper on the scope of the draft guidelines on connected clients under Article 4(1)(39) of the Capital Requirements Regulation (CRR). The objective of the definition of ‘group of connected clients’ in Article 4(1)(39) of the CRR is to identify clients so closely linked by idiosyncratic risk … Continue Reading

EBA opinion on CRR II and CRD V proposals on own funds

Article 80 of the Capital Requirements Regulation (CRR) mandates the European Banking Authority (EBA) to monitor the quality of own funds instruments issued by institutions across the Union and to notify the European Commission immediately where there is significant evidence of those instruments not meeting the criteria set out in Article 28, or where applicable, … Continue Reading

ECB guide for fit and proper assessments

The European Central Bank (ECB) has published a guide to fit and proper assessments. The guide is relevant to significant credit institutions that fall under the direct supervision of the ECB and is intended to ensure consistency in the application of the fit and proper assessment criteria, with a view to establishing common supervisory practices … Continue Reading
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