United Kingdom

Topic: Capital adequacy

Subscribe to Capital adequacy RSS feed

EBA publishes final draft technical standards to identify investment firms’ risk takers and to specify the instruments used for the purposes of variable remuneration

On 21 January 2021, the European Banking Authority (EBA) published final reports containing draft regulatory technical standards (RTS) on: Criteria to identify categories of staff whose professional activities have a material impact on an investment firm’s risk profile or assets it manages under the Investment Firm Directive (IFD). The draft RTS set out qualitative and … Continue Reading

EBA consults on guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate EU parent undertakings under Article 21b of CRD IV

On 15 January 2021, the European Banking Authority (EBA) issued a consultation paper on draft guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate EU parent undertakings as laid down in the CRD IV. Article 21b of the CRD IV sets out a requirement for institutions belonging to … Continue Reading

PS29/20 – CRD V

On 28 December 2020, the PRA published Policy Statement 29/20: Capital Requirements Directive V (CRD V) (PS29/20). In PS29/20 the PRA sets out the final policy to Consultation Paper 22/20: Designation of firms within certain consolidation groups (CP22/20) . It also contains final PRA Rulebook instruments, Statements of Policy, Supervisory Statements and templates as published … Continue Reading

PRA statement on the EU requirement on prudential treatment of software assets

On 30 December 2020, the PRA issued a statement following the publication in the Official Journal of the EU of European Commission Delegated Regulation 2020/2176 which adopts the European Banking Authority (EBA) regulatory technical standards on the prudential treatment of software assets per Article 36(1)(b) of the amended Capital Requirements Regulation (CRR). In the statement … Continue Reading

Commission Implementing Regulation (EU) laying down ITS for the application of the CRR with regard to supervisory reporting of institutions and repealing Implementing Regulation (EU) No 680/2014

On 21 December 2020, the European Commission adopted an Implementing Regulation laying down implementing technical standards (ITS) for the application of the Capital Requirements Regulation with regard to supervisory reporting of institutions and repealing Implementing Regulation (EU) No 680/2014 together with annexes. The Implementing Regulation lays down uniform reporting formats and templates, instructions on and … Continue Reading

The Bank of England’s review of its approach to setting a minimum requirement for own funds and eligible liabilities

On 18 December 2020, the Bank of England (BoE) published a Discussion Paper that is the first part of its review of the BoE’s approach to setting a minimum requirement for own funds and eligible liabilities (MREL). The BoE wishes to use the Discussion Paper to open up a broad dialogue with interested parties on … Continue Reading

EBA launches consultation to amend standards on benchmarking of internal models

On 17 December 2020, the European Banking Authority (EBA) issued a consultation paper setting out proposals for draft Implementing Technical Standards (ITS) amending the European Commission’s Implementing Regulation on the benchmarking of credit risk, market risk and IFRS9 models. The draft ITS have been developed in accordance with Article 78 of the Capital Requirements Directive … Continue Reading

Policy Statement 20/16: Updating the dual-regulated firms Remuneration Code to reflect CRD V

On 17 December 2020, the FCA published Policy Statement 20/16: Updating the dual-regulated firms Remuneration Code to reflect CRD V (PS20/16). The CRD V contains amendments to the provisions on remuneration upon which FCA rules for dual-regulated firms are based. In Consultation Paper 20/14: Updating the Dual-regulated firms Remuneration Code to reflect CRD V (CP20/14), … Continue Reading

EBA launches consultation on its new guidelines on internal governance for investment firms

On 17 December 2020, the European Banking Authority (EBA) issued a consultation paper concerning draft guidelines on internal governance under the Investment Firm Directive (IFD). The guidelines are intended to complete the various governance provisions in the IFD, taking into account the principle of proportionality, by specifying the tasks, responsibilities and organisation of the management … Continue Reading

EBA consults on draft guidelines on remuneration policies for investment firms

On 17 December 2020, the European Banking Authority (EBA) issued a consultation paper containing draft guidelines on remuneration for investment firms as defined in Article 4(1)(1) of MiFID II that do not meet all of the conditions for qualifying as small and non-interconnected investment firms under Article 12(1) of the Investment Firm Regulation (IFR) and … Continue Reading

EBA updates its report on liquidity measures and confirms banks’ solid liquidity position

On 17 December 2020, the European Banking Authority (EBA) published a report on liquidity measures. The report monitors and evaluates the liquidity coverage requirements currently in place in the EU. The liquidity coverage ratio (LCR) of EU banks stood at around 166% in June 2020, materially above the minimum threshold of 100%. The report shows … Continue Reading

EBA publishes final draft technical standards on capital requirements of non-modellable risks under the FRTB

On 17 December 2020, the European Banking Authority (EBA) published a final report containing draft Regulatory Technical Standards (RTS) on the capitalisation of non-modellable risk factors (NMRFs) for institutions using the FRTB Internal Model Approach (IMA) implemented in EU as a reporting requirement.  The RTS have been developed in accordance with Article 325bk(3) of the … Continue Reading

Tackling non-performing loans (NPLs) to enable banks to support EU households and businesses

On 16 December 2020, the European Commission published its strategy to prevent a future build-up of non-performing loans (NPLs) across the EU, as a result of the COVID-19 pandemic. The strategy has four main goals: Further developing secondary markets for distressed assets. A key step in this process would be the adoption of the Commission’s … Continue Reading

EBA consults on technical standards to calculate risk weights of collective investment undertakings

On 16 December 2020, the European Banking Authority (EBA) issued a consultation paper on regulatory technical standards (RTS) on the calculation of risk-weighted exposure amounts of collective investment undertakings (CIUs) in line with the Capital Requirements Regulation. The proposed draft RTS, which will contribute to the calculation of own funds requirements for the exposures in … Continue Reading

EBA publish final draft technical standards on the prudential treatment of investment firms

On 16 December 2020, the European Banking Authority (EBA) issued a final report containing seven final draft regulatory technical standards (RTS) on the prudential treatment of investment firms. The first draft RTS included in the final report have been developed for the mandates related to the authorisation of certain credit institutions. Article 8a(6)(a) of the … Continue Reading

EBA updates its Basel III impact study following the EU Commission’s call for advice

On 15 December 2020, the European Banking Authority (EBA) published its updated ad-hoc impact study on the implementation of Basel III in the EU in response to the European Commission’s call for advice. The study is based on a sample of 99 banks and has a reference date of December 2019. Under the full implementation … Continue Reading

Commission adopts Delegated Regulation on specialised lending exposures under CRR

On 14 December 2020, the European Commission adopted a Delegated Regulation supplementing the Capital Requirements Regulation (CRR) with regard to regulatory technical standards (RTS) for assigning risk weights to specialised lending exposures together with an annex. The RTS specify how institutions should take into account the factors of financial strength, political and legal environment, transaction … Continue Reading

EBA formal opinion on Commission amendments to RTS on the assessment methodology for IRB approach

On 14 December 2020, the European Banking Authority (EBA) published a formal opinion on the European Commission’s amendments of the final draft regulatory technical standards (RTS) on the specification of the assessment methodology for competent authorities regarding compliance of an institution with the requirements to use the internal ratings based (IRB) approach in accordance with … Continue Reading

CP20/24: A new UK prudential regime for MiFID investment firms

On 14 December 2020, the FCA published Consultation Paper 20/24: A new UK prudential regime for MiFID investment firms (CP20/24). CP20/24 follows Discussion Paper 20/2: Prudential Requirements for MIFID Investment Firms which the FCA issued in June 2020. In CP20/24 the FCA is seeking views on the first tranche of it proposed rules to introduce … Continue Reading

Financial stability report – December 2020

On 11 December 2020, the Bank of England (BoE) published its latest Financial Stability Report. Key headlines from the report include: UK households and businesses have needed support from the financial system to weather the economic disruption associated with the COVID-19 pandemic. The financial system has so far provided that support, reflecting the resilience that … Continue Reading

PRA Policy Statement on CRD V

On 9 December 2020, the PRA published Policy Statement 26/20: Capital Requirements Directive V (PS26/20). In PS26/20 the PRA provides feedback to responses to Consultation Paper 12/20: Capital Requirements Directive V (CP12/20) and Consultation Paper 17/20: Capital Requirements Directive V – further implementation (CP17/20). It also contains near-final rules instruments, statements of policy, supervisory statements, … Continue Reading

Basel III monitoring results based on end-December 2019 data published by the Basel Committee

On 10 December 2020, the Basel Committee on Banking Supervision issued the results of its latest Basel III monitoring exercise, based on data as of 31 December 2019. The report sets out the impact of the Basel III framework that was agreed in 2010 as well as the effects of the Basel Committee’s finalisation of … Continue Reading

EBA updates impact of the Basel III reforms on EU banks’ capital

On 10 December 2020, the European Banking Authority (EBA) issued a report on the impact of implementing the final Basel III reforms in the EU. The full Basel III implementation, in 2028, would result in an average increase of 15.4% on the current Tier 1 minimum required capital of EU banks. The results do not … Continue Reading

PRA consults on designation of firms within certain consolidation groups

On 10 December 2020, the PRA published Consultation Paper 22/20: Designation of firms within certain consolidation groups (CP22/20). The proposals on CP22/20 are relevant to banks and PRA-designated investment firms that are part of a UK consolidation group controlled by a UK parent financial holding company or a UK parent mixed financial holding company. From … Continue Reading
LexBlog