Featured Product

    EBA Issues Advice on Review of Macro-Prudential Framework

    In response to the European Commission Call for Advice on the review of macro-prudential framework, the European Banking Authority (EBA) proposed a set of recommendations to simplify the procedures around existing macro-prudential tools and enhance harmonization for other tools.

    As part of the review, in June 2021, the European Commission had issued a request to the EBA, European Systemic Risk Board (ESRB), and the European Central Bank (ECB) for advice on the overall design and functioning of the buffer framework, missing or obsolete instruments, internal market considerations, and global risks. EBA highlighted the need for targeted changes to make the macro-prudential framework more effective and to improve the functioning of the Single Market, thus proposing the following recommendations:

    • Rebuild regulatory capital buffers to sufficient levels so that they can be released when needed again in the future
    • Maintain clear roles and responsibilities of the different authorities involved in micro-prudential and macro-prudential policies as well as close coordination between them
    • Postpone the assessment of interaction between the input and output floors and the macro-prudential measures to the next review of the macro-prudential toolkit, as the input and output floors were recently introduced in the Basel III standard and are yet to be fully applicable
    • Include a legal mandate in the Capital Requirements Directive (CRD) to develop methodologies covering both the identification of other systemically important institutions (O-SIIs) and the setting of buffer rates
    • Simplify the text of the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR) around governance procedures for some macro-prudential measures
    • Undertake a comprehensive evaluation of the interaction of macro-prudential measures with other capital requirements, such as leverage ratio, own funds, and eligible liabilities (MREL) requirements, in light of the implementation of the new elements introduced in the revised regime (constituting CRR2, CRD5, and the revised Bank Recovery and Resolution Directive) 
    • Perform further assessments on the ability of current macro-prudential tools to address environmental risks, crypto assets, and cyber security risks
    • Establish an oversight and monitoring system for non-bank lenders and enlarge the scope of the macro-prudential framework to cover non-bank lenders (which include fintech lenders and peer-to-peer lending platforms)

    Article 513 of the CRR requires the European Commission to complete a review of the macro-prudential provisions in the CRR and CRD by June 2022 and, if appropriate, to submit a legislative proposal to the European Parliament and to the Council by December 2022. The European Commission has also launched a consultation to gather other stakeholder views and experience with the current macro-prudential rules.

     

    Related Links

     

    Keywords: Europe, EU, Banking, Macro-Prudential Framework, Basel, Regulatory Capital, ESG, Climate Change Risk, MREL, Macro-Prudential Policy, CRD, CRR, Crypto-Assets, Cyber Risk, Reporting, Systemic Risk, EBA, Subheadline

    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