Featured Product

    EBA Opines on EC-Proposed Changes to Own Funds & Eligible Liabilities

    April 08, 2022

    The European Banking Authority (EBA) issued an opinion on amendments proposed by the European Commission to the draft regulatory technical standards for own funds and eligible liabilities.

    In the opinion, EBA expressed its disagreement with two substantive changes proposed by the European Commission to the draft regulatory standards for own funds and eligible liabilities, though it agrees with certain other amendments that do not imply a change in policy and represent non-substantive changes. The amendments with the substantive changes relate to the provisions covering the notions of direct and indirect funding and the prior permission process for certain types of liquidation entities. 

    In relation to provisions covering direct and indirect funding, EBA clarified that the direct and indirect funding rules should capture situations where the funding is provided by an entity included in the scope of prudential or accounting consolidation, regardless of whether it involves an external investor or not. The rules ensure that entities issue actual loss-absorbing capacity and prevent them from issuing instruments that might eventually expose them to their own losses. EBA also clarified that the rules are not meant to prevent normal banking transactions between a parent and its subsidiaries or between entities belonging to the same accounting or prudential group (intragroup transactions) and such undesired effect has not been reported under the regulatory technical standards on own funds. EBA states that the draft technical standards already contain, from a supervisory perspective, the necessary principles or tools needed for capturing all cases of direct or indirect funding.

    In relation to the prior permission regime for liquidation entities, EBA clarified its intention to avoid an unnecessary administrative burden for resolution authorities and liquidation entities. EBA provides resolution authorities with the opportunity to grant a general prior permission for certain liquidation entities, based on the information that is already available to them for the purpose of drawing up the resolution plan. While following a risk-based approach, under which institutions with a similar risk profile could be subject to a similar decision, the resolution authority can still, on a case-by-case basis, determine the limit of or even decide not to grant a general prior permission. Hence, EBA considers that its final draft regulatory technical standards designed a prior permission regime proportionate to the goals of the regulation and is of the opinion that no change is warranted.

     

    Related Links

     

    Keywords: Europe, EU, Banking, Regulatory Technical Standards, Own Funds, MREL, CRR, BRRD, TLAC, Eligible Liabilities, Basel, Regulatory Capital, EBA, EC

    Featured Experts
    Related Articles
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    News

    IOSCO Welcomes Work on Sustainability-Related Corporate Reporting

    The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)

    September 15, 2022 WebPage Regulatory News
    News

    BoE Allows One-Day Delay in Statistical Data Submissions by Banks

    The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.

    September 14, 2022 WebPage Regulatory News
    News

    ACPR Amends Reporting Module Timelines Under EBA Framework 3.2

    The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.

    September 14, 2022 WebPage Regulatory News
    News

    ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies

    The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)

    September 13, 2022 WebPage Regulatory News
    News

    APRA to Modernize Prudential Architecture, Reduces Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.

    September 12, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8514