Featured Product

    ESRB Report Examines Macro-Prudential Measures Adopted in EU in 2018

    April 30, 2019

    ESRB published a report that provides an overview of the macro-prudential measures that were adopted in EU in 2018. Across EU, most member states adopted macro-prudential measures in 2018 and more measures were taken in 2018 than in 2017, which is the previous review period.

    The report describes the changes in policy frameworks and outlines the national macro-prudential measures that were adopted in 2018. It first reviews certain trends seen across different instruments and then turns to specific instruments. The report also contains three special features. Special Feature A considers the use to date of national flexibility measures under Article 458 of the Capital Requirements Regulation (CRR) by member states, along with the lessons learned from their experience with these measures. Special Feature B introduces the concept of macro-prudential stance, particularly the interlinkages between the stance assessment and the policy action assessment. Special Feature C provides an overview of the upcoming changes to macro-prudential provisions in CRR and the Capital Requirements Directive (CRD) IV. 

    Apart from the activation of the countercyclical capital buffer (CCyB) and the increase in the CCyB rate in several European Economic Area member states, nine member states introduced a systemic risk buffer (SyRB) or recalibrated the SyRB rate. As there are indications that the financial cycle is turning in some countries, more member states tightened the CCyB. By the end of 2018, twelve countries in the European Economic Area had decided on a positive CCyB rate. Despite extensive international and European guidance for the use of CCyB, differences in key features of the national frameworks remained. These include the objective of the instrument, the neutral buffer rate, and the indicators used to inform the buffer decision. Given shortcomings of the credit-to-GDP gap as a reference indicator for CCyB decisions, particularly after periods of prolonged excessive credit growth and for transition economies, some member states developed adjusted indicators and placed greater weight on additional indicators and discretion to arrive at a policy judgment. After that, the most frequently introduced measure in 2018 pertained to the caps on debt service-to income (DSTI) ratios. Changes to the methodology used to identify systemically important institutions (SIIs) and to set their buffers were also made relatively often.

     

    Related Link: Report (PDF)

     

    Keywords: Europe, EU, Banking, Systemic Risk, CCyB, CRR, SyRB, CRD IV, Macro-Prudential Policy, Macro-Prudential Measures, ESRB

    Featured Experts
    Related Articles
    News

    APRA Updates Validation and Derivation Rules in September 2020

    APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    September 24, 2020 WebPage Regulatory News
    News

    EC Proposes Frameworks for Crypto-Assets and Operational Resilience

    EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.

    September 24, 2020 WebPage Regulatory News
    News

    ECB Publishes Opinion on Proposals to Amend Securitization Framework

    ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.

    September 24, 2020 WebPage Regulatory News
    News

    FCA Consults on Regulation of International Firms in UK

    FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.

    September 23, 2020 WebPage Regulatory News
    News

    MAS Amends Notice on Capital Adequacy Requirements of Banks

    MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.

    September 23, 2020 WebPage Regulatory News
    News

    FCA to Begin to Move Firms to New Data Collection Platform RegData

    FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.

    September 23, 2020 WebPage Regulatory News
    News

    ISDA Expects IBOR Fallbacks to be Effective by End of January 2021

    ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.

    September 23, 2020 WebPage Regulatory News
    News

    APRA Reviews Repayment Deferral Plans, Identifies Best Practices

    APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.

    September 22, 2020 WebPage Regulatory News
    News

    ESAs Assess Risks to Financial Sector After COVID-19 Outbreak

    ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.

    September 22, 2020 WebPage Regulatory News
    News

    BoE Confirms Withdrawal of COVID Corporate Financing Facility

    BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.

    September 22, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5836