The Council of the EU has published a note and a progress report on the European Commission’s (Commission) initiatives to strengthen the EU Banking Union and to establish risk-reduction measures.  The Commission’s legislative initiatives were a draft:

  • Regulation amending the Capital Requirements Regulation (CRR);
  • Directive amending the Capital Requirements Directive IV;
  • Directive amending the Bank Recovery and Resolution Directive (BRRD);
  • Directive amending the BRRD as regards the ranking of unsecured debt instruments in insolvency hierarchy; and
  • Regulation amending the Single Resolution Mechanism.

Among other things the note mentions that:

  • the Council’s general approach to the draft Directive amending the BRRD has been fast tracked in order to foster early compliance with the total loss absorbency capacity / minimum requirement for own funds and eligible liabilities requirements. The fast tracking of this legislative proposal has been deemed necessary to give institutions a sound legal basis to issue buffers of eligible debt and legal certainty to investors; and
  • there has been split from the draft Regulation amending the CRR the provisions concerning the phase-in of the regulatory impact of the International Financial Reporting Standard (IFRS) 9 on Financial Instruments and the phase-out of the exemption from the large exposures rules for certain sovereign exposures and fast track the relevant provisions as a self-standing draft Regulation.

View Council of EU progress report on banking reform legislative proposals, 14 June 2017

View Council note on strengthening of the Banking Union / Risk-reduction measures, 12 June 2017

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