On 23 April 2025, the European Commission adopted a Delegated Regulation supplementing the Capital Requirements Regulation (CRR) with regard to regulatory technical standards (RTS) specifying the conditions and indicators that the European Banking Authority (EBA) is to use to determine whether extraordinary circumstances in the sense of Article 325az(5) and Article 325bf(6) of that Regulation have occurred.

Background

Articles 325bf(6) and 325az(5) of the CRR, amended by Regulation 2024/1623, provides that Member State competent authorities may permit institutions to derogate from certain requirements of the regulatory framework for the use of internal models, or apply a softer version of those requirements, where a situation of extraordinary circumstances has occurred. Article 325az(9) of the CRR further provides that the occurrence of extraordinary circumstances shall be determined by the EBA, which must issue an opinion to that effect.

Delegated Regulation

The Delegated Regulation establishes a high-level framework for identifying a situation of extraordinary circumstances, by setting out conditions that need to be met and indicators that the EBA shall use to determine whether extraordinary circumstances have occurred.

Next steps

The Delegated Regulation enters into force on the twentieth day following its publication in the Official Journal of the EU.