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BIS publishes working paper on embedded supervision in blockchain finance

On 16 September 2019 the Bank for International Settlements (BIS) published a working paper by its Monetary and Economic Department on Embedded supervision: how to build regulation into blockchain finance. The working paper suggests that asset tokenisation and the use of the underlying distributed ledger technology (DLT) in finance provides new avenues for the supervision … Continue Reading

HM Treasury letter concerning proposed Regulation on recovery and resolution of CCPs

On 16 September 2019, HM Treasury published a letter from John Glen, Economic Secretary to the Treasury to Sir William Cash, House of Commons European Committee Chair, providing an update on the current status of the proposal for an EU Regulation on the recovery and resolution of central counterparties (CCPs). Mr Glen states that the … Continue Reading

Commission FAQs on PSD2 and SCA

On 13 September 2019, the European Commission (Commission) published a set of FAQs on the revised Payment Services Directive (PSD2). The FAQs provide an overview of PSD2 and how it benefits consumers. They also detail the requirements of Strong Customer Authentication (SCA), which came into force on 14 September 2019, and set out the exemptions … Continue Reading

New leadership of the European Commission announced: Valdis Dombrovskis to keep financial services portfolio

On 10 September 2019 the President-elect of the European Commission, Ursula von der Leyen, announced the list of Commissioner-designates and the allocation of their respective portfolios. Under a new structure of the College of Commissioners with its eight Vice-Presidents, the responsibility for DG Financial Stability, Financial Services and Capital Markets Union (DG FISMA) will remain … Continue Reading

EBA to clarify prudential treatment applicable to own funds instruments at the end 2021

On 9 September 2019, the European Banking Authority (EBA) announced that it intends to provide clarity on the appropriate treatment of legacy instruments at the end of 2021. When the Capital Requirements Regulation (CRR) entered into force, grandfathering provisions were introduced to ensure that institutions had sufficient time to meet the requirements set out by … Continue Reading

EBA speech on AML and CTF powers

On 5 September 2019, the European Banking Authority (EBA) published a speech given by Jose Manuel Campa, EBA Chair, on the EBA’s current and future anti-money laundering (AML) and counter terrorist financing (CTF) powers. Mr Campa discusses the limitation of the EBA’s existing powers in relation to enforcing its standards and guidelines and to promote … Continue Reading

ESMA publishes stress simulation framework for investment funds

On 2 September 2019, the European Securities and Markets Authority (ESMA) published a final report on guidelines on liquidity stress testing in UCITS and AIFs (the Guidelines). In April 2018, the European Systemic Risk Board (ESRB) published a set of recommendations to address liquidity and leverage risk in investment funds. One of the ESRB’s recommendations … Continue Reading

ECB Chair introductory statement to European Parliament’s Economic and Monetary Affairs Committee

On 4 September 2019, the European Central Bank (ECB) published the introductory statement given by its chair, Andrea Enria, at the first ordinary hearing in 2019 at the European Parliament’s Economic and Monetary Affairs Committee. Among other things, the statement lists the ECB’s work and priorities for the near future. In particular, the ECB will: … Continue Reading

EBA adds Securitisation Regulation to its online Interactive Single Rulebook and Q&A tools

On 2 September 2019, the European Banking Authority (EBA) updated its Interactive Single Rulebook and Q&A tool on the “simple, transparent and standardised” (STS) Securitisation Regulation. The update allows users to review all the EBA’s final technical standards and guidelines associated with the Securitisation Regulation by navigating through the legislation on an article by article … Continue Reading

ESMA final guidance on liquidity stress test guidance for investment funds

On 2 September 2019, the European Securities and Markets Authority (ESMA) published its final guidance regarding liquidity stress testing of investment funds – applicable to Alternative Investment Funds (AIFs) and Undertakings for the Collective Investments in Transferable Securities (UCITS). The report follows an earlier consultation in February 2019 (see previous blog post here) on draft … Continue Reading

EPC update on Brexit and SEPA transactions involving UK-based participants

On 2 September 2019, the European Payments Council (EPC) published recommendations for all participants in Single Euro Payments Area (SEPA) schemes in the event of a no-deal Brexit on 31 October 2019. The guidance follows an earlier EPC decision in March 2019 that approved an application from UK Finance for the continued participation of UK … Continue Reading

HM Treasury letter addressing concerns on proposed crowdfunding legislation

On 30 August 2019, HM Treasury published a letter (dated 27 August 2019) from John Glen, Economic Secretary to the Treasury to Lord Boswell of Aynho, House of Lords EU Committee Chair, addressing concerns regarding uncertainty around the content of the European Commission’s (the Commission) proposed Regulation on European crowdfunding service providers for business and … Continue Reading

Commission update on work relating to cryptoassets

On 28 August 2019, the European Commission (the Commission) published an answer given by Valdis Dombrovskis (Vice-President European Commission, Financial Stability, Financial Services and Capital Markets Union) concerning cryptoassets. In its response, the Commission refers to an announcement made in its 2018 Action Plan on FinTech (see previous blog post here) that it is looking … Continue Reading

ECB decisions on adopting decisions on passporting, acquisition of qualifying holdings and withdrawal of authorisations of credit institutions

On 28 August 2019, there was published in the Official Journal of the EU, the following decisions relating to the Regulation on the Single Supervisory Mechanism (SSM): Decision (EU) 2019/1376 of the European Central Bank (ECB) on delegation of the power to adopt decisions on passporting, acquisition of qualifying holdings and withdrawal of authorisations of … Continue Reading

EBA reports on funding plans and asset encumbrance

On 28 August 2019, the European Banking Authority (EBA) published the following: a report on funding plans. The purpose of the report is to assess the feasibility of EU banks’ funding plans submitted for the banking system in the EU. The EBA’s findings include, among other things, that the total assets of banks increased in … Continue Reading

ECB communication on supervisory coverage expectations for NPEs

On 22 August 2019, the European Central Bank (ECB) issued a communication on supervisory expectations for non-performing exposures (NPEs). The communication begins by stating that addressing non-performing loans (NPLs) has been one of the key priorities for ECB Banking Supervision since its inception. The overall objective of developing the supervisory approach to NPLs is to … Continue Reading

Joint EBA and ESMA response to the letter of 19 July 2019 on crypto-assets

On 20 August 2019, the European Securities and Markets Authority and the European Banking Authority (together the European Supervisory Authorities) published a letter in response to an earlier letter from Valdis Dombrovskis (Vice-President European Commission, Financial Stability, Financial Services and Capital Markets Union) concerning crypto-assets, including so-called ‘stablecoins’. The letter outlines some of the European … Continue Reading

Report by the ECB working group on euro risk-free rates

On 19 August 2019, the European Central Bank’s (ECB) working group on euro risk-free rates published a report that focuses on the impact that the transition from the current euro overnight index average (EONIA) to the ECB’s euro short-term rate (€STR) will have on cash and derivatives products. In the report, the working group analyses … Continue Reading

ECB advises banks to ramp up no-deal preparations

On 14 August 2019, the European Central Bank (ECB) published an article on its website calling on banks to step up their preparations for a no-deal Brexit at the end of October 2019. The ECB asserts that banks have transferred significantly fewer activities, critical functions and staff to euro area entities than originally foreseen as … Continue Reading

European Commission agrees MOU with SRB

On 13 August 2019, the Single Resolution Board (SRB) published a memorandum of understanding (MOU) between itself and the European Commission in respect of co-operation and information exchange pursuant to the Single Resolution Mechanism Regulation (SRMR). The MOU aims to codify best practices and ensure that effective working arrangements are in place between the Commission … Continue Reading

EBA opinion on deposit guarantee schemes

Article 19(6) of the Deposit Guarantee Schemes Directive (DGSD) requires the European Commission to submit to the European Parliament and to the Council a report on the progress towards the implementation of the DGSD. To support the Commission in meeting this obligation, the European Banking Authority (EBA) committed to drafting three opinions on the DGSD. … Continue Reading

ESRB Recommendation amending 2015 Recommendation on EU macroprudential policy measures and 2014 Recommendation on CCyB

On 6 August 2019, there was published in the Official Journal of the European Union the Recommendation of the European Systemic Risk Board (ESRB) of 28 June 2019 postponing certain deadlines for the submission of reports prescribed in two ESRB Recommendations: Recommendation ESRB/2015/2 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential … Continue Reading

EBA feedback on review of single rulebook Q&A tool

On 6 August 2019, the European Banking Authority (EBA) published feedback following an earlier review of its single rulebook Q&As. The scope of the review was limited to Q&As relating to the Capital Requirements Regulation and the Capital Requirements Directive IV, with a focus on policy issues, on which around 625 questions have been answered, … Continue Reading

EBA issues advice on Basel III implementation

On 5 August 2019, the European Banking Authority (EBA) published its report to the European Commission, following an earlier call for advice in May 2018, on the assessment of the implementation of Basel III in the EU. The advice presents the findings of the EBA’s quantitative impact assessment analysis based on data from 189 banks … Continue Reading
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