United Kingdom

Topic: Banking

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Financial Services (Banking Reform) Act 2013 (Commencement No 12) Order 2018

On 5 December 2018, there was published on legislation.gov.uk The Financial Services (Banking Reform) Act 2013 (Commencement No. 12) Order 2018. The Order brings into force on 1 January 2019 twelve provisions of the Financial Services (Banking Reform) Act 2013 (c. 33) relating to the ring-fencing regime that are not already in force. The ring-fencing … Continue Reading

Political agreement reached on EU Banking Package

On 5 December 2018, the European Parliament announced that it had reached agreement with the European Council of the EU on the Banking Package – the Capital Requirements Directive V (CRD V), Capital Requirements Regulation II (CRR II), Bank Recovery and Resolution Directive II (BRRD II) and the Single Resolution Mechanism Regulation II (SRMR II). … Continue Reading

Securitisation Regulations 2018

On 4 December 2018, the Securitisation Regulations 2018 were published on the legislation.gov.uk website, together with an explanatory memorandum. The EU Securitisation Regulation applies in the UK from 1 January 2019. Although it is directly applicable, the Securitisation Regulations 2018 make certain legislative changes to ensure that processes are in place relating to the supervision … Continue Reading

Council of EU invited to endorse banking package trilogues

On 3 December 2018, the Council of the EU published a note (the Note) from its Permanent Representatives Committee (COREPER) regarding the ‘Banking Package’ comprising of legislative amendments to the Capital Requirements Regulation, Capital Requirements Directive IV, the Bank Recovery and Resolution Directive and the Single Resolution Mechanism Regulation. The Note states that the Austrian … Continue Reading

HM Treasury responds to consultation on Banks and Building Societies (Priorities on Insolvency) Order 2018

On 29 November 2018, HM Treasury published its response to its earlier consultation on the then draft The Banks and Building Societies (Priorities on Insolvency) Order 2018. Among other things HM Treasury responds to a comment regarding the status of unpaid dividends in the revised creditor hierarchy. HM Treasury states that section 74 of the … Continue Reading

Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018

On 28 November 2018, there was published on legsislation.gov.uk The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (the Order), together with an explanatory memorandum. The Order supplements the Financial Guidance and Claims Act 2018, and transfers the regulation of claims management activities from the Claims Management Regulation Unit in the Ministry … Continue Reading

Banks and Building Societies (Priorities on Insolvency) Order 2018

On 28 November 2018, there was published on legislation.gov.uk The Banks and Building Societies (Priorities on Insolvency) Order 2018 (the Order), together with an explanatory memorandum. The Order implements the Bank Creditor Hierarchy Directive which in turn amends the Bank Recovery and Resolution Directive, specifically the ranking of unsecured debt within the insolvency hierarchy, providing … Continue Reading

Commission progress report on reducing NPLs in EU

On 28 November 2018, the European Commission published its third progress report on the reduction of non-performing loans (NPL) and further risk reduction in the Banking Union (the Report). The Report notes that NPL ratios continued to decline in the first half of 2018. This followed the overall trend of improvement over recent years. The … Continue Reading

FSB Chair letter to G20 leaders reports on progress made in 2018 and highlights main issues ahead

On 27 November 2018, the Financial Stability Board (FSB) published a letter to G20 leaders on its progress made during 2018.  The letter is structured along the priorities of the G20 Argentine Presidency: addressing emerging vulnerabilities while harnessing the benefits of innovation. The FSB has continued to be vigilant in containing the risks of non-bank … Continue Reading

Appointment of new FSB Chair and Vice Chair

On 26 November 2018, the Financial Stability Board (FSB) appointed Randal K Quarles (Governor and Vice Chairman for Supervision at the US Federal Reserve) as its new Chair and Klaas Knot (President of De Nederlandsche Bank) as Vice Chair, for a three year term starting on 2 December 2018. After the three year term Mr … Continue Reading

ECB speech – how supervisors can help banks prepare for crises

On 23 November 2018, the European Central Bank (ECB) published a speech from its chair, Danièle Nouy (DN), entitled From a wish list to a to-do list: how supervisors can help banks prepare for crises. In her speech DN states that “finishing the work on NPLs [non-performing loans] is at the top of our to-do … Continue Reading

Implementation of the Basel standards – report to G20 leaders

On 23 November 2018, the Basel Committee on Banking Supervision (Committee) published a report summarising the steps taken by its members to adopt the Basel III standards, banks’ progress in bolstering their capital and liquidity positions, the consistency of implementation in jurisdictions since the Committee’s last report and the Committee’s implementation work plan. The report … Continue Reading

PRA consults on updates to statement of policy on systemic risk buffer

On 22 November 2018, PRA published Consultation Paper 29/18: The systemic risk buffer: updates to the Statement of Policy (CP29/18). In CP29/18 the PRA proposes minor updates to its Statement of Policy ‘The PRA’s approach to the systemic risk buffer’ (SoP). CP29/18 is relevant to ring-fenced bodies within the meaning of section 142A of the … Continue Reading

EBA draft handbook on valuation for purposes of resolution

On 23 November 2018, the European Banking Authority published a draft handbook on valuation for purposes of resolution, with a view to operationalising the valuation process in order to facilitate its implementation by resolution authorities in case of crisis. The handbook is addressed to resolution authorities and aims to be a useful non-exhaustive support document … Continue Reading

EIB report – Banking in Africa: Delivering on Financial Inclusion, Supporting Financial Stability

On 22 November 2018, the European Investment Bank (EIB) published the fourth edition of its banking in Africa report. This latest report, Banking in Africa: Delivering on Financial Inclusion, Supporting Financial Stability, includes the results of the EIB’s survey of banking groups operating in Africa. It also contains three thematic chapters which address the challenges … Continue Reading

BoE guidance on implementation of valuation capabilities to support resolvability SoP

On 20 November 2018, the Bank of England (BoE) published a letter (dated 19 November 2018) sent to chief finance officers (CFOs) of firms within scope of its  statement of policy on valuation capabilities to support resolvability (SoP). The letter notifies firms of the SoP published in June 2018 and is intended to provide  CFOs … Continue Reading

SRB issues 2018 MREL policy

On 20 November 2018, the Single Resolution Board (SRB) published its 2018 minimum requirement for own funds and eligible liabilities (MREL) policy for the first wave of resolution plans. This document aims to make the public in general, and institutions in particular, aware of the SRB MREL policy as well as the process currently being … Continue Reading

ECB speech on supervisory activities developments in the banking union

On 20 November 2018, the European Central Bank (ECB) published a speech given by Daniele Nouy, Chair of the Supervisory Board of the ECB, at an ordinary hearing for the European Parliament’s Committee on Economic and Monetary Affairs. The speech is focused around four areas: key developments and risks in the euro banking area: euro … Continue Reading

ECB opinion on draft Directive on credit servicers, credit purchasers and the recovery of collateral

On 14 March 2018, the European Commission published a package of measures targeting non-performing loans (NPLs). Among these measures was a proposal for a Directive on credit servicers, credit purchasers and the recovery of collateral (the draft Directive). The aim of the draft Directive is to increase the efficiency of debt recovery procedures through the … Continue Reading

EBA final report on RTS on the estimation and identification of economic downturns

Under the advanced internal ratings-based (IRB) approach, institutions determine their own funds requirements for credit risk taking into account their own loss given default (LGD) and conversion factor (CF) estimates. According to Article 181(1)(b) of the Capital Requirements Regulation, institutions shall estimate LGDs that are appropriate for an economic downturn and according to Article 182(1)(b) … Continue Reading

Regulation on EBA relocation published in OJ

On 16 November 2018, there was published in the Official Journal of the EU (OJ) the Regulation that moves the seat of the European Banking Authority to Paris (Regulation (EU) 2018/1717 of the European Parliament and of the Council of 14 November 2018 amending Regulation (EU) No 1093/2010 as regards the location of the seat … Continue Reading

FSB publishes latest list of G-SIBs

On 16 November 2018, the Financial Stability Board (FSB) published its 2018 list of global systemically important banks (G-SIBs) The overall number of G-SIBs has fallen from 30 to 29, with the Royal Bank of Scotland and Nordea being removed, and Groupe BPCE being added to the list. The ‘buckets’ to which each bank has … Continue Reading

Decline in correspondent banking – FSB issues progress report

On 16 November 2018, the Financial Stability Board (FSB) published its progress report (the Report) to the G20 November summit on its action plan to assess and address the decline in correspondent banking. The FSB launched in November 2015 an action plan to address the decline in correspondent banking relationships, centred around: examining the dimensions … Continue Reading

ECB general topics chapter of guide to internal models under SSM

On 15 November 2018, the European Central Bank (ECB) has published the general topics chapter of its guide to internal models (the Guide), together with a feedback statement to the ECB’s March consultation on the chapter (the Statement). The Guide provides transparency on how the ECB understands the general (i.e. non-model-specific) topics for internal models, … Continue Reading
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