Article 395 of the Capital Requirements Regulation (CRR) gives the European Banking Authority (EBA) a mandate to develop guidelines to set appropriate aggregate limits or tighter individual limits on exposures to shadow banking entities which carry out banking activities outside the regulated framework.

The EBA has now published a consultation paper proposing criteria to set limits on EU institutions’ exposures to shadow banking entities. The draft guidelines set out a qualitative approach for institutions to develop their internal policies for monitoring and setting appropriate limits, both at individual and aggregate levels.

The deadline for comments on the consultation paper is 19 June 2015. The EBA will hold a public hearing on the consultation on 28 May 2015.

View EBA consults on exposures to shadow banking, 19 March 2015