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Topic: Banking

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FSB evaluation of too-big-to-fail reforms for systemically important banks

On 23 May 2019, the Financial Stability Board (FSB) launched an evaluation into the G20 post-financial crisis too-big-to-fail reforms. The summary terms of reference have also been published. The objectives of the evaluation are twofold to: assess whether the reforms for which implementation has been completed or are underway are reducing the systemic and moral … Continue Reading

Statement on progress of adoption of risk-free rates

On 15 May 2019, the Bank of England published a statement on behalf of its Working Group on Sterling Risk-Free Reference Rates (WG) regarding the progress on adoption of risk-free rates in sterling markets. Key points in the statement include: sterling-denominated financial markets have begun to shift decisively away from LIBOR and towards SONIA; in … Continue Reading

ISDA consults on benchmark fallbacks

On 17 May 2019, the International Swaps and Derivatives Association (ISDA) published two consultations on benchmark fallbacks – the first consultation covers adjustments that would apply to fallback rates in the event certain interbank offered rates (IBORs) are permanently discontinued, and the second consultation relates to pre-cessation issues for LIBOR and certain other IBORs. Specifically, … Continue Reading

BoE speech on operational resilience work programme

On 14 May 2019, the Bank of England (BoE) published a speech given by Nick Strange, BoE Director, Supervisory Risk Specialists, providing a progress report on operational resilience. Operational resilience is defined in the speech as “the ability of firms, FMIs [financial market infrastructures] and the sector as a whole to prevent, respond to, recover … Continue Reading

Council of EU adopts banking package reforms

On 14 May 2019, the European Council announced that it had adopted the European Commission’s banking package reforms (relating to the revised Capital Requirements Regulation / Directive, and the revised Bank Recovery and Resolution Directive, and Single Resolution Mechanism Directive). Our extended blog on these reforms can be found here. The proposals implement reforms agreed … Continue Reading

EBA seeks extension for addressing Commission’s call for advice on benchmarking of national loan enforcement frameworks

On 7 May 2019, the European Banking Authority (EBA) published a letter it sent to the Director General for Financial Stability at the Financial Services and Capital Markets Union (FISMA), dated 5 March 2019, regarding the European Commission’s call for advice (CFA) for the purposes of a benchmarking of national loan enforcement frameworks (including insolvency … Continue Reading

Basel Committee progress report on implementation of Basel regulatory framework

On 7 May 2019, the Basel Committee on Banking Supervision (Basel Committee) published its sixteenth progress report on the adoption of the Basel III regulatory framework. The report sets out the adoption status of the Basel III standards for each Basel Committee member jurisdiction as of end-March 2019. Key updates as regards the adoption of … Continue Reading

IFSB consults on Shari’ah compliant lender of last resort facilities draft guidance note

On 7 May 2019, the Islamic Financial Services Board (IFSB) published for consultation a draft of Guidance Note 7 (GN7) on Sharīʻah-compliant lender-of-last-resort (SLOLR) facilities. GN7 is primarily intended to serve as a benchmark for Central Banks (CBs) in establishing and operationalising an SLOLR framework that applies to full-fledged Islamic commercial banks and Islamic commercial … Continue Reading

PRA sets systemic risk buffer rates for ring-fenced banks and large building societies

The systemic risk buffer (SRB) is one of the elements of the overall capital framework for UK banks and building societies as set out by the Financial Policy Committee (FPC) in its publication ‘The framework of capital requirements for UK banks’, which was published alongside the December 2015 Financial Stability Report. The SRB is applied … Continue Reading

Commission adopts report assessing the implementation of the BRRD and the SRMR

On 30 April 2019, the European Commission adopted a technical evaluation report on the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism (SRMR). The report notes that so far, there is limited experience on the application of the BRRD and SRMR to failing or likely to fail banks. The case of Banco … Continue Reading

ECB sets supervisory fees at €576 million for 2019

On 30 April 2019, the European Central Bank (ECB) set its supervisory fees at €576 million for 2019. The ECB estimates that €559 million will be spent on the prudential supervision of banks. However, the €576 million also covers a €15.3 million deficit carried forward from 2018 and owing to adjustments to individual fees, amounting … Continue Reading

ESRB review of macro-prudential policy in the EU

On 30 April 2019, the European Systemic Risk Board (ESRB) published a report setting out its review of macro-prudential policy in the EU in 2018. The review provides an overview of the measures of macro-prudential interest that were adopted in the EU in 2018. Key messages in the review include: as there are indications that … Continue Reading

EBA report on supervisory colleges

On 30 April 2019, the European Banking Authority (EBA) published its 2018 report on supervisory colleges. The core of the report focuses on some key observations regarding the 2018 cycle of supervisory colleges. These observations cover: (i) organisational aspects of the colleges’ work and interactions; (ii) colleges’ deliverables; and (iii) the key topics for supervisory … Continue Reading

FSB April 2019 plenary meeting

On 26 April 2019, the Financial Stability Board (FSB) published a press release summarising the key areas of discussion at its plenary meeting in New York. Key takeaways from the plenary include: financial markets generally functioned well during the period of volatility at the end of 2018. Nonetheless, the FSB recognises that a more severe … Continue Reading

FSB reports on thematic review on resolution regimes

On 29 April 2019, the Financial Stability Board (FSB) published a report on its thematic review on bank resolution planning. The report evaluates the implementation by FSB jurisdictions of the resolution planning standard as set out in the FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions. It focuses on resolution planning for all domestically … Continue Reading

BoE’s approach to concurrent stress testing

On 24 April 2019, the Bank of England (BoE) published a report by its Independent Evaluation Office (IEO) evaluating the BoE’s approach to concurrent stress testing. The IEO found good evidence that the approach successfully delivers on its principal objective: to provide a forward-looking assessment of banks’ resilience and, linked to that, an orderly and … Continue Reading

Mutually assured cooperation – the issue of cross-border banks

On 12 April 2019, the European Central Bank (ECB) published a speech by Andrea Enria (Chair of the ECB Supervisory Board) on the issue of cross-border banks. Mr Enria begins his speech by discussing the lessons that were learnt on crisis management during the 2008 global financial crisis. He also discusses what the ECB has … Continue Reading

EBA updates list of diversified indices

On 11 April 2019, the European Banking Authority (EBA) updated the list of diversified indices, which was originally published in December 2013. The list is part of the implementing technical standards (ITS) drafted to calculate the capital requirements for position risk in equities according to the standardised rules. The list was updated according to the … Continue Reading

ECB launches public consultation on amendments to the supervisory fees framework

On 11 April 2019, the European Central Bank (ECB) launched a public consultation on proposed changes to the ECB Regulation on supervisory fees. The proposed amendments mainly concern the individual fees the ECB levies on the banks it supervises and the timing of their collection. Most importantly, the proposals will result in the ECB calculating … Continue Reading

Basel Committee – new section on website setting out consolidated version of the global standards

The Basel Committee on Banking Supervision (Basel Committee) has launched a new section of its website that sets out a consolidated version of its global standards for the regulation and supervision of banks. The new area of the website provides the full set of standards of the Basel Committee. Also, the website enables users to view the … Continue Reading

PRA consults on revisions to the Branch Return Form

On 8 April 2019, the PRA published Consultation Paper 8/19: Supervising international banks: revision of the Branch Return Form (CP8/19). CP8/19 is relevant to all existing and prospective PRA-supervised branches of deposit-takers and PRA designated investment firms which are not UK headquartered firms. CP8/19 sets out the PRA’s proposals for changes to the format and … Continue Reading

EBA final report on RTS on conditions to allow institutions to calculate KIRB

On 8 April 2019, the European Banking Authority (EBA) published a report containing the final draft regulatory technical standards (RTS) specifying the conditions that allow institutions to calculate the capital requirements of the securitised exposures (KIRB) in accordance with the purchased receivables approach under Article 255 of the Capital Requirements Regulation (CRR). The draft RTS, … Continue Reading

EBA clarifies the second set of issues raised by its working group on APIs

On 1 April 2019, the European Banking Authority (EBA) published clarifications to the second set of issues raised and discussed by participants of its working group on application programming interfaces (APIs) under the revised Payments Services Directive (PSD2). The issues relate to API performance and support, the provision of a list of third party providers … Continue Reading