A ‘credit institution’ is defined in the Capital Requirements Regulation (CRR) as ‘an undertaking the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account’.

On 23 October 2013, the European Banking Authority (EBA) received a request from the European Commission (the Commission) to carry out a comprehensive study of various legal and quantitative aspects regarding ‘credit institutions’ as defined in the CRR and other entities carrying on in the EU bank-like activities within the scope of credit intermediation. Further to this request the EBA conducted a survey of competent authorities to identify, among other things, the approach of each Member State as regards the interpretation of the term ‘credit institution’.

The EBA has now published an opinion addressed to the Commission concerning the definition of credit institutions and the differing approaches to interpretation adopted by EU Member States. The opinion is based on a report that the EBA has also published which sets out the findings of the comprehensive study.

In its opinion, the EBA observes that there is a degree of variation across EU Member States as to the interpretation of the term “credit institution” as a result of the absence of a definition of key terms, such as “deposit” and “other repayable funds”. The EBA calls on the Commission to give consideration to possible clarifications to the definition in light of its usage in, for example, the Deposit Guarantee Schemes Directive, the Bank Recovery and Resolution Directive and the Single Supervision Mechanism.

View EBA publishes opinion on the perimeter of credit institutions, 27 November 2014