Italy

Topic: Capital adequacy

Subscribe to Capital adequacy RSS feed

EBA flags to the EU Commission elements of the definition of credit institution and aspects of the scope of authorisation

On 18 September 2020, the European Banking Authority (EBA) published an opinion addressed to the European Commission to raise awareness as to the opportunity to clarify certain issues relating to the definition of credit institution in the upcoming review of the Capital Requirements Regulation (CRR) and the Capital Requirements Directive IV. The opinion illustrates that … Continue Reading

ECB finalises guide to assessing how banks calculate counterparty credit risk

On 18 September 2020, the European Central Bank (ECB) published its finalised guide outlining the methodology it uses to assess how euro area banks under its supervision calculate their exposure to counterparty credit risk (CCR) and advanced credit valuation adjustment (CVA) risk, following a public consultation which ended on 18 March 2020. The Capital Requirements … Continue Reading

EBA consults on guidelines on criteria for the use of data inputs in the risk-measurement model referred to in Article 325bc under Article 325bh(3) of the CRR

 On 12 August 2020, the European Banking Authority (EBA) published a consultation paper on draft guidelines that clarify the conditions to be met by the data related to modellable risk factors, which institutions should use in their expected shortfall (ES) calculations. The guidelines clarify that the data used to compute the ES risk measure should … Continue Reading

EBA publishes final draft technical standards on disclosure and reporting on MREL and TLAC

On 3 August 2020, the European Banking Authority (EBA) published final draft Implementing Technical Standards (ITS) on disclosure and reporting on the global systemically important institution (G-SII) requirement for own funds and eligible liabilities (TLAC) and the minimum requirements for own funds and eligible liabilities (MREL). This is the first time that the EBA has … Continue Reading

EBA consults on technical standards on indirect subscription of MREL instruments within groups

On 27 July 2020, the European Banking Authority (EBA) issued a public consultation on draft Regulatory Technical Standards (RTS)  specifying the methods to avoid that instruments indirectly subscribed by the resolution entity for the purpose of meeting the minimum requirement for own funds and eligible liabilities (MREL), applicable to entities that are not themselves resolution … Continue Reading

EBA consults on draft RTS on the determination of indirect exposures to underlying clients of derivatives and credit default derivatives under Article 390(9) CRR2

On 23 July 2020, the European Banking Authority (EBA) issued a consultation paper on draft regulatory technical standards (RTS) specifying how institutions should determine exposures arising from derivative and credit derivative contracts not entered directly into with a client but whose underlying debt or equity instrument was issued by a client. Article 390(5) of the … Continue Reading

The EBA observes an increase in high earners in 2018 and the persistence of differences in remuneration practices across the EU

On 22 July 2020, the European Banking Authority published its report on benchmarking of remuneration practices in EU banks for the financial years 2017 and 2018 and high earners data for 2018. The data shows that in 2018, the number of high earners in EU banks receiving a remuneration of more than EUR 1 million … Continue Reading

EBA is looking into ways to reduce reporting costs

On 22 July 2020, the European Banking Authority (EBA) issued a questionnaire addressed to all European banks and a call for case studies to collect evidence on reporting costs as well as industry views on ways to reduce such costs and make supervisory reporting more efficient. The EBA is mandated by Article 430(8) of the … Continue Reading

EBA consults on guidelines specifying the conditions for the substitution approach in the context of “tri-party transactions” for large exposures purposes

On 22 July 2020, the European Banking Authority (EBA) issued a consultation paper detailing on the three conditions institutions should comply with when they decide to make use of the alternative treatment with regard to tri-party repurchase agreements facilitated by a tri-party agent. Article 403(3) of the Capital Requirements Regulation (CRR) provides that an institution … Continue Reading

EBA consults on draft technical standards on default probabilities and loss given default for default risk model under the internal approach for market risk

On 22 July 2020, the European Banking Authority (EBA) issued a consultation paper on draft regulatory technical standards on default probabilities (PDs) and loss given default (LGD) for default risk model for institutions using the new Internal Model Approach (IMA) under the Fundamental Review of the Trading Book (FRTB). Institutions using an alternative internal model … Continue Reading

ECB guideline on definition of default for banks directly supervised by national supervisors

On 8 July 2020, the European Central Bank (ECB) issued guidance on the definition of the materiality threshold for banks that are directly supervised by Member State national competent authorities (NCAs). The guidance specifies how NCAs shall exercise the discretion conferred on competent authorities under Article178(2)(d) of the Capital Requirements Regulation in relation to less … Continue Reading

Corrigendum to CRD V

On 3 July 2020, there was published in the Official Journal of the EU a Corrigendum to the Capital Requirements Directive V (CRD V). The Corrigendum makes amendments to the following articles of the CRD V: 21a (approval of financial holding companies and mixed financial holding companies), 21b (intermediate EU parent undertaking), 104a (additional own … Continue Reading

Basel Committee reports on Basel III implementation

On 6 July 2020, the Basel Committee on Banking Supervision (Basel Committee) published a report setting out the adoption status of the Basel III standards in member jurisdictions as of end-May 2020. The report notes that as of end-May 2020, all 27 member jurisdictions have risk-based capital rules, liquidity coverage ratio regulations and capital conservation … Continue Reading

EBA guidelines on treatment of structural FX under the CRR

On 1 July 2020, the European Banking Authority (EBA) issued final guidelines concerning the treatment of structural foreign exchange (FX) under the Capital Requirements Regulation (CRR). The purpose of the guidelines is to ensure harmonised EU interpretation and implementation of Article 352(2) of the CRR which deals with the concept and specific application of structural … Continue Reading

Corrigendum to CRD IV

On 26 June 2020, there was published in the Official Journal of the EU, a Corrigendum to the CRD IV. The Corrigendum amends: Point (d)(iv) of Article 141(8) CRD IV so that it reads: ‘(iv) the payment of variable remuneration or discretionary pension benefits, whether by creation of a new obligation to pay, or payment … Continue Reading

Basel Committee proposes amendment to capital rules for non-performing loan securitisations

On 23 June 2020, the Basel Committee on Banking Supervision (Basel Committee) published a technical amendment, ‘Capital treatment of securitisations of non-performing loans’. The technical amendment establishes a 100% risk weight for certain senior tranches of non-performing loan securitisations. The risk weight applicable to the other positions are determined by the existing hierarchy of approaches, … Continue Reading

COVID-19: European legislators approve CRR “quick fix”

On 18 June 2020 the European Parliament adopted its legislative report on the targeted amendments to the Capital Requirements Regulation (CRR “quick fix”). The Parliament’s position reflects a compromise agreed with Member States in informal negotiations that preceded the vote. This paves a way for a formal adoption, publication in the EU Official Journal and … Continue Reading

ESRB Recommendation cancelling certain macro-prudential reports

On 19 June 2020, there was published in the Official Journal of the EU the decision of the European Systemic Risk Board (ESRB) of 2 June 2020 on the cancellation of certain reports on actions and measures taken pursuant to Recommendation ESRB/2014/1 and Recommendation ESRB/2015/2 of the ESRB. The decision entered into force on 3 … Continue Reading

EBA launches consultation on technical standards specifying the prudential treatment of software assets

On 9 June 2020, the European Banking Authority (EBA) launched a consultation on draft Regulatory Technical Standards (RTS) specifying the prudential treatment of software assets. As the banking sector is moving towards a more digital environment, the aim of these draft RTS is to achieve an appropriate balance between the need to maintain a certain … Continue Reading

EBA starts delivering on the implementation of the new regulatory framework for investment firms

On 4 June 2020, the European Banking Authority (EBA) outlined its roadmap for the implementation of the new regulatory framework for investment firms and launched a public consultation on its first set of regulatory deliverables on prudential, reporting, disclosures and remuneration requirements. The roadmap outlines the EBA’s work plan for each of the mandates laid … Continue Reading

Basel framework: FAQs

On 5 June 2020, the Basel Committee on Banking Supervision (Basel Committee) issued a frequently asked questions (FAQs) document to promote the consistent interpretation of the Basel framework. The FAQs cover a range of issues relating to the reform of benchmark reference rates and clarifications relating to the standardised approach to operational risk. The FAQs … Continue Reading

EBA consults on technical standards on capital requirements of non-modellable risks under the FRTB

On 4 June 2020, the European Banking Authority (EBA) issued a consultation paper regarding draft regulatory technical standards (RTS) on the calculation of the stress scenario risk measure under Article 325bk(3) of the revised Capital Requirements Regulation (CRR2). The CRR2 implements, among other things, the revised requirements to compute own funds requirements for market risk … Continue Reading

EBA roadmap on investment firms EBA mandates arising from IFR/IFD

On 2 June 2020, the European Banking Authority (EBA) published a roadmap setting out its intentions concerning the mandates given to it under the Investment Firm Directive (IFD) and the Investment Firm Regulation (IFR). The EBA’s mandates under the IFD and IFR cover a broad range of areas including 18 regulatory technical standards, 3 implementing … Continue Reading

EBA consults on draft amended technical standards on own funds and eligible liabilities

On 29 May 2020, the European Banking Authority (EBA) published a consultation paper on the draft amended regulatory technical standards (RTS) on own funds and eligible liabilities. Since their entry into force, the RTS on own funds have significantly enhanced regulatory harmonisation of prudential rules and contributed to strengthening the quality of regulatory capital. With … Continue Reading
LexBlog