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Topic: Capital adequacy

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EBA consults on guidance to assess breaches of the large exposure limits

On 17 February 2021, the European Banking Authority (EBA) published a consultation paper concerning draft guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits of Article 395(1) of the Capital Requirements Regulation (CRR) and the time and measures to return to compliance pursuant to Article 396(3) of the … Continue Reading

EBA publishes final guidelines on the conditions for the alternative treatment of “tri-party repurchase agreements” for large exposure purposes

On 16 February 2021, the European Banking Authority (EBA) issued final guidelines specifying the conditions for the application of the alternative treatment of institutions’ exposures related to ‘tri-party repurchase agreements’ for large exposure purposes. Under the alternative treatment, institutions are allowed to replace the total amount of their exposures to a collateral issuer due to … Continue Reading

Commission report on a possible extension of the leverage ratio buffer framework to O-SIIs and on the definition and calculation of the total exposure measure, including the treatment of central bank reserves

On 16 February 2021, the European Commission (Commission) published a report on a possible extension of the leverage ratio buffer framework to other systemically important institutions (O-SIIs) and on the definition and calculation of the total exposure measure, including the treatment of central bank reserves. The legal basis of the report is Article 511 of … Continue Reading

EBA consultation on draft ITS on supervisory disclosure under the IFD

On 11 February 2021, the European Banking Authority (EBA) issued a consultation paper on draft implementing technical standards (ITS) on the information concerning the new prudential requirements that Member State competent authorities will be required to disclose publicly for all types of investment firm authorised under MiFID II. The draft ITS are part of the … Continue Reading

Alterations to the methodology for identifying EU G-SIIs

On 11 February 2021, the European Commission published a Delegated Regulation amending Delegated Regulation (EU) No 1222/2014 supplementing the Capital Requirements Directive IV (CRD IV) with regard to regulatory technical standards (RTS) for the specification of the methodology for the identification of global systemically important institutions and for the definition of subcategories of global systemically … Continue Reading

Proposed Directive on credit services and credit purchasers – table on positions to commence trilogues

On 10 February 2021, the Council of the EU published a note containing a three-column table setting out the current position from the Commission, Council and European Parliament on the proposed Directive on credit services and credit purchasers.… Continue Reading

EBA launches 2021 EU-wide stress test exercise

On 1 February 2021, the European Banking Authority (EBA) announced the launch of its 2021 EU-wide stress test and released the macro-economic scenarios. The stress test will be conducted on a sample of 50 EU banks – 38 from countries under the jurisdiction of the Single Supervisory Mechanism – covering approximately 70% of total banking … Continue Reading

ESAs consult to amend technical standards on the mapping of ECAIs’ credit assessment

On 29 January 2021, the Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) issued a consultation paper concerning draft implementing technical standards (ITS) amending Implementing Regulation (EU) 2016/1799 on the mapping of ECAIs’ credit assessments under Article 136(1) and (3) of the Capital Requirements Regulation. The draft ITS contain … Continue Reading

Basel Committee proposes amendments to rules on haircut floors for securities financing transactions

On 26 January 2021, the Basel Committee on Banking Supervision published for consultation two technical amendments to the standard on minimum haircut floors for securities financing transactions (SFTs). Technical amendments are defined as changes in the Basel standards that are not substantial in nature but that cannot be unambiguously resolved based on the current text. … Continue Reading

EBA publishes final draft technical standards to identify investment firms’ risk takers and to specify the instruments used for the purposes of variable remuneration

On 21 January 2021, the European Banking Authority (EBA) published final reports containing draft regulatory technical standards (RTS) on: Criteria to identify categories of staff whose professional activities have a material impact on an investment firm’s risk profile or assets it manages under the Investment Firm Directive (IFD). The draft RTS set out qualitative and … Continue Reading

EBA consults on guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate EU parent undertakings under Article 21b of CRD IV

On 15 January 2021, the European Banking Authority (EBA) issued a consultation paper on draft guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate EU parent undertakings as laid down in the CRD IV. Article 21b of the CRD IV sets out a requirement for institutions belonging to … Continue Reading

Commission Implementing Regulation (EU) laying down ITS for the application of the CRR with regard to supervisory reporting of institutions and repealing Implementing Regulation (EU) No 680/2014

On 21 December 2020, the European Commission adopted an Implementing Regulation laying down implementing technical standards (ITS) for the application of the Capital Requirements Regulation with regard to supervisory reporting of institutions and repealing Implementing Regulation (EU) No 680/2014 together with annexes. The Implementing Regulation lays down uniform reporting formats and templates, instructions on and … Continue Reading

EBA launches consultation to amend standards on benchmarking of internal models

On 17 December 2020, the European Banking Authority (EBA) issued a consultation paper setting out proposals for draft Implementing Technical Standards (ITS) amending the European Commission’s Implementing Regulation on the benchmarking of credit risk, market risk and IFRS9 models. The draft ITS have been developed in accordance with Article 78 of the Capital Requirements Directive … Continue Reading

Policy Statement 20/16: Updating the dual-regulated firms Remuneration Code to reflect CRD V

On 17 December 2020, the FCA published Policy Statement 20/16: Updating the dual-regulated firms Remuneration Code to reflect CRD V (PS20/16). The CRD V contains amendments to the provisions on remuneration upon which FCA rules for dual-regulated firms are based. In Consultation Paper 20/14: Updating the Dual-regulated firms Remuneration Code to reflect CRD V (CP20/14), … Continue Reading

EBA launches consultation on its new guidelines on internal governance for investment firms

On 17 December 2020, the European Banking Authority (EBA) issued a consultation paper concerning draft guidelines on internal governance under the Investment Firm Directive (IFD). The guidelines are intended to complete the various governance provisions in the IFD, taking into account the principle of proportionality, by specifying the tasks, responsibilities and organisation of the management … Continue Reading

EBA consults on draft guidelines on remuneration policies for investment firms

On 17 December 2020, the European Banking Authority (EBA) issued a consultation paper containing draft guidelines on remuneration for investment firms as defined in Article 4(1)(1) of MiFID II that do not meet all of the conditions for qualifying as small and non-interconnected investment firms under Article 12(1) of the Investment Firm Regulation (IFR) and … Continue Reading

EBA updates its report on liquidity measures and confirms banks’ solid liquidity position

On 17 December 2020, the European Banking Authority (EBA) published a report on liquidity measures. The report monitors and evaluates the liquidity coverage requirements currently in place in the EU. The liquidity coverage ratio (LCR) of EU banks stood at around 166% in June 2020, materially above the minimum threshold of 100%. The report shows … Continue Reading

EBA publishes final draft technical standards on capital requirements of non-modellable risks under the FRTB

On 17 December 2020, the European Banking Authority (EBA) published a final report containing draft Regulatory Technical Standards (RTS) on the capitalisation of non-modellable risk factors (NMRFs) for institutions using the FRTB Internal Model Approach (IMA) implemented in EU as a reporting requirement.  The RTS have been developed in accordance with Article 325bk(3) of the … Continue Reading

Tackling non-performing loans (NPLs) to enable banks to support EU households and businesses

On 16 December 2020, the European Commission published its strategy to prevent a future build-up of non-performing loans (NPLs) across the EU, as a result of the COVID-19 pandemic. The strategy has four main goals: Further developing secondary markets for distressed assets. A key step in this process would be the adoption of the Commission’s … Continue Reading

EBA consults on technical standards to calculate risk weights of collective investment undertakings

On 16 December 2020, the European Banking Authority (EBA) issued a consultation paper on regulatory technical standards (RTS) on the calculation of risk-weighted exposure amounts of collective investment undertakings (CIUs) in line with the Capital Requirements Regulation. The proposed draft RTS, which will contribute to the calculation of own funds requirements for the exposures in … Continue Reading

EBA publish final draft technical standards on the prudential treatment of investment firms

On 16 December 2020, the European Banking Authority (EBA) issued a final report containing seven final draft regulatory technical standards (RTS) on the prudential treatment of investment firms. The first draft RTS included in the final report have been developed for the mandates related to the authorisation of certain credit institutions. Article 8a(6)(a) of the … Continue Reading

EBA updates its Basel III impact study following the EU Commission’s call for advice

On 15 December 2020, the European Banking Authority (EBA) published its updated ad-hoc impact study on the implementation of Basel III in the EU in response to the European Commission’s call for advice. The study is based on a sample of 99 banks and has a reference date of December 2019. Under the full implementation … Continue Reading

Commission adopts Delegated Regulation on specialised lending exposures under CRR

On 14 December 2020, the European Commission adopted a Delegated Regulation supplementing the Capital Requirements Regulation (CRR) with regard to regulatory technical standards (RTS) for assigning risk weights to specialised lending exposures together with an annex. The RTS specify how institutions should take into account the factors of financial strength, political and legal environment, transaction … Continue Reading

EBA formal opinion on Commission amendments to RTS on the assessment methodology for IRB approach

On 14 December 2020, the European Banking Authority (EBA) published a formal opinion on the European Commission’s amendments of the final draft regulatory technical standards (RTS) on the specification of the assessment methodology for competent authorities regarding compliance of an institution with the requirements to use the internal ratings based (IRB) approach in accordance with … Continue Reading
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