On 18 June 2024, the European Commission (Commission) published a speech by Mairead McGuinness (European Commissioner for Financial Services, Financial Stability and Capital Markets Union) in which she discusses the Capital Markets Union and Banking Union.

Among other things Commissioner McGuinness makes the following points:

  • The Commission is looking and analysing at how to revive the EU securitisation market to make it more attractive for issuers and investors. It will launch a public consultation in the autumn so that it can act as soon as possible to scale up the EU securitisation market.
  • Completing the Basel III reforms is a major achievement for the Commission, and it recognises the importance of sticking to the implementation date of 1 January 2025. The only area where the Commission is empowered to delay the entry into application of the new standards is market risk, if the level playing field cannot be ensured. This is the so-called “Fundamental Review of the Trading Book”, or FRTB. The Commission feels that it has become clear that the United States (US) will delay its implementation of Basel III and in practice it is now highly unlikely that the US will not implement the reforms before 1 January 2026, at the earliest. Therefore, the Commission will use its empowerment to postpone the date of application of the rules on market risk in the EU by one year, until 1 January 2026. The Commission will work closely with the new European Parliament and the Council in this process. It will adopt this delay by way of a delegated act which will be subject to scrutiny by the European Parliament and the Council. This will take a minimum of 3 months. The delay of one year of the market risk rules in the EU should not be considered an encouragement to depart from the Basel standards. The EU is adhering to 1 January 2025 for entry into application of the bulk of the Basel standards. But on market risk, it feels the need to ensure a global level playing field and alignment on the entry into application of the rules.