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Topic: Capital adequacy

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Commission adopts Implementing Regulation on ITS on supervisory reporting to reflect operational risk, sovereign exposures and additional monitoring metrics for liquidity reporting

  The European Commission has adopted Commission Implementing Regulation (EU)…/… of xxx amending the Implementing Regulation (EU) No 680/2014 (laying down implementing technical standards with regard to supervisory reporting of institutions according to the Capital Requirements Regulation) as regards templates and instructions. The amended requirements will apply as of 1 March 2018. View Commission Implementing … Continue Reading

EBA peer review report on guidelines on criteria for identifying O-SIIs

The European Banking Authority (EBA) has published a final peer review report that presents the outcomes of the ongoing review exercise on the Guidelines on the criteria to determine the conditions of application of Article 131(3) of Capital Requirements Directive IV in relation to the assessment of other systemically important institutions (Guidelines).… Continue Reading

DNB letter regarding changes to supervisory framework for proprietary traders

On 13 November 2017, the Dutch Central Bank (De Nederlandsche Bank, DNB) circulated a letter on amendments that will be made to the regulatory framework for the so-called local firms (plaatselijke ondernemingen) (the Letter). In its letter, DNB states that investment firms holding a licence to perform the investment activity of “proprietary trading” only since … Continue Reading

ECB opinion on amendments to the EU framework for capital requirements of credit institutions and investment firms

The European Central Bank (ECB) has published an opinion that discusses: changes to the existing EU regulatory and supervisory framework. This section includes a discussion of the following topics: (i) proposed amendments to the implementation of the Pillar 2 requirements of the Basel III framework in the CRD IV; (ii) cross-border waiver for prudential requirements; … Continue Reading

EBA launches consultation on technical standards specifying the methods of prudential consolidation

The European Banking Authority (EBA) has issued a consultation on draft regulatory technical standards (RTS) specifying the different methods of prudential consolidation, which can be applied when certain conditions and criteria are met. The EBA has developed the draft RTS in accordance with the mandate in Article 18(7) of the Capital Requirements Regulation (CRR) pursuant … Continue Reading

EBA opinion on matters relating to the regulatory perimeter under CRD IV and CRR

The European Banking Authority (EBA) has published an opinion addressed to the European Parliament, Council and European Commission, on matters relating to the regulatory perimeter under the Capital Requirements Directive IV / Capital Requirements Regulation (CRD IV / CRR). These include the use of Articles 2(5) and 9(2) of the CRD IV and the interpretation … Continue Reading

EBA provides overview of CAs implementation and transposition of the CRD IV package

The European Banking Authority (EBA) has updated the information that EU Competent Authorities have disclosed to it on supervisory disclosure. The information, published in an aggregated format, provides an overview of the implementation and transposition of the Capital Requirements Directive and Capital Requirements Regulation across the EU. It also provides a detailed picture of the … Continue Reading

EBA launches consultations to strengthen the Pillar 2 framework

The European Banking Authority (EBA) has published the following: Consultation Paper – Draft guidelines on the revised common procedures and methodologies for the supervisory review and evaluation process (SREP) and supervisory stress testing. The revisions to the SREP guidelines reflect the ongoing policy initiatives related to Pillar 2/SREP, which include amongst other things, the introduction … Continue Reading

Commission adopts Delegated Regulation supplementing CRR with regard to RTS for the materiality threshold for credit obligations past due

The European Commission has adopted a Delegated Regulation supplementing the Capital Requirements Regulation with regard to regulatory technical standards (RTS) for the materiality threshold for credit obligations past due. The RTS specify the conditions according to which a Member State competent authority (NCAs) shall set the threshold for the materiality of a credit obligation past … Continue Reading

EBA corrects portfolio identifiers for 2018 benchmarking exercise

The European Banking Authority (EBA) has announced that it has made corrections to Annex 1 of its implementing technical standards (ITS) on benchmarking of internal approaches under Article 78(8) of the Capital Requirements Directive IV in order to define the benchmarking portfolios for the 2018 benchmarking exercise. The EBA explains that the corrections eliminate some … Continue Reading

BCBS statement on treatment of derivative liabilities under NSFR

The Basel Committee on Banking Supervision (Basel Committee) has agreed to allow national discretion for the net stable funding ratio’s (NSFR) treatment of derivative liabilities. The Basel Committee notes that this should facilitate the implementation of the NSFR, which is expected to begin on 1 January 2018. The NSFR assigns a 20% “required stable funding” … Continue Reading

EBA final guidelines on internal governance under CRD IV

The European Banking Authority (EBA) has published guidelines on internal governance under the CRD IV. Article 74 of the Capital Requirements Directive IV (CRD IV) mandates the EBA to develop such guidelines in order to harmonise institutions’ internal governance arrangements, processes and mechanisms within the EU. The guidelines complete the various governance provisions in CRD … Continue Reading

ESMA and EBA final guidelines on assessment of suitability of management body members

The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) have co-published guidelines on the assessment of the suitability of members of the management body and key function holders under the CRD IV and MiFID II. Article 91(12) of the CRD IV and Article 9(1) of MiFID II mandate ESMA and the … Continue Reading

Basel Committee updates FAQs on Basel III definition of capital

The Basel Committee on Banking Supervision (Basel Committee) has published a revised version of its FAQs on the definition of capital. Updated material is marked in italics.‎ In addition, two flowcharts have been added to the annex to the document. The flowcharts are designed to aid understanding of the application of the Basel III transitional … Continue Reading

Basel III monitoring results

The Basel Committee on Banking Supervision (Basel Committee) has published the results of its latest Basel III monitoring exercise based on data as of 31 December 2016. Data has been provided from a total of 200 banks comprising 105 large internationally active banks. The “Group 1 banks” are defined as internationally active banks that have … Continue Reading

Commission adopts Delegated Regulation on waiver of own funds requirements for certain covered bonds under CRR

Article 129(1) of the Capital Requirements Regulation (CRR) grants preferential treatment to covered bonds collateralized by senior units issued by French Fonds Communs de Titrisation or equivalent securitization entities, securitising residential (point (d)) or commercial (point (f)) property exposures, provided that certain conditions are met: they qualify for credit quality step 1 under the credit … Continue Reading

ECON report on draft Regulation amending the CRR

The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published its report on the draft Regulation that amends the Capital Requirements Regulation relating to the introduction of International Financial Reporting Standard 9 (IFRS 9). In a resolution of 6 October 2016, the European Parliament called for a progressive phase-in regime that would mitigate … Continue Reading

ECB guidance on CRR securitisation notifications

The European Central Bank (ECB) has published a letter from Ms Daniele Nouy, Chair of the ECB Supervisory Board, to the management of significant banks. The letter sets out public guidance on how the ECB expects to be notified of transactions which go beyond the contractual obligations of a sponsor institution or an originator institution, … Continue Reading

ESRB annual report 2016

The European Systemic Risk Board (ESRB) has published its annual report for 2016. The report notes that the ESRB continued to identify four main risks to financial stability in the EU, namely: a re-pricing of risk premia in global financial markets; weaknesses in balance sheets of banks, insurers and pension funds; debt sustainability challenges in … Continue Reading

EBA roadmap on monitoring ECAIs

The European Banking Authority (EBA) has published its future work plan on credit assessments issued by External Credit Assessment Institutions (ECAIs). The EBA’s future work on ECAIs will focus on the following: mapping and decision on unsolicited ratings for newly registered or certified ECAIs as well as assessment of ECAIs originally issuing only solicited ratings … Continue Reading

EBA final draft RTS and ITS on authorisation of credit institutions under CRD IV

The European Banking Authority (EBA) has published draft regulatory technical standards (RTS) and draft implementing technical standards (ITS) pursuant to the mandates set out in Articles 8(2) and 8(3) of the Capital Requirements Directive IV. Specifically: the RTS set out the information to be provided in applications for the authorisation of credit institutions. The aim … Continue Reading

Delegated Regulation on RTS further specifying additional objective criteria relating to liquidity coverage for credit institutions

There has been published in the Official Journal of the European Union (OJ), Commission Delegated Regulation (EU) 2017/1230 of 31 May 2017 supplementing the Capital Requirements Regulation with regard to regulatory technical standards further specifying the additional objective criteria for the application of a preferential liquidity outflow or inflow rate for cross-border undrawn credit of … Continue Reading

Commission adopts Implementing Regulation on ITS on supervisory reporting to reflect IFRS 9 changes to FINREP

The European Banking Authority (EBA) has announced that the European Commission (Commission) has adopted the Implementing Act amending Regulation (EU) No 680/2014 (Implementing Technical Standards on Supervisory Reporting) with regard to financial reporting following the changes in the International Accounting Standards (IFRS 9). Publication of the Implementing Act in the Official Journal of the EU … Continue Reading

Capital treatment for simple, transparent and comparable short-term securitisations proposed by Basel Committee

The Basel Committee on Banking Supervision (BCBS) has issued a consultative document, Capital treatment for simple, transparent and comparable short-term securitisations. The consultative document supplements an earlier consultative document that the BCBS co-published with the International Organization of Securities Commissions (Criteria for identifying simple, transparent and comparable short-term securitisations). The consultative document contains additional guidance … Continue Reading
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