On 10 March 2021, the European Banking Authority (EBA) issued a consultation paper containing draft guidelines on a common assessment methodology for granting authorisation as a credit institution. The draft guidelines have been drafted in accordance with Article 8(5) Capital Requirements Directive IV (CRD IV), which mandates the EBA to specify a common assessment methodology for granting authorisations in accordance with that Directive. The draft guidelines are addressed to Member State competent authorities (NCAs) and complement the regulatory technical standards on authorisation of credit institutions

The draft guidelines set out a methodology that will support NCAs understanding of a credit institution’s business model, risk profile, geographical distribution of activities, and viability and sustainability of its business. It will also form the basis for the determination of capital at authorisation and further prudential requirements. The draft guidelines are in line with recent legislative developments, including the specific focus on the need for the applicant to demonstrate sound and effective risk management pursuant to Article 10, paragraph (2) CRD IV. It also expressly includes guidance regarding the money laundering / terrorist financing risk as part of the risks to be considered in the context of the assessment of the application for granting authorisation along with the importance of cooperation with the anti-money laundering supervisory and other public bodies as appropriate in accordance with Article 117(5) CRD IV. Lastly, pursuant to Article 14(1) CRD IV the draft guidelines cover the assessment of shareholders and members, and the assessment of holders of qualifying holdings in accordance with the criteria set out in Article 23 CRD IV, as further specified in the joint European Supervisory Authorities’ guidelines for the prudential assessment of qualifying holdings.

The deadline for comments on the consultation paper is 10 June 2021. A public hearing will be held via conference call on 22 April 2021.

When finalised the guidelines apply from 1 March 2022.