BaFin Issues Regulatory Updates for Banks in Germany
The Federal Financial Supervisory Authority of Germany (BaFin) published a circular on determination of the minimum requirement for own funds and eligible liabilities (MREL) for institutions and group companies, for which the wind-up plan provides for liquidation in the context of insolvency proceedings. This circular will replace the previous MREL circular that was published in August 2019. BaFin also launched a consultation (12/2021) on revisions to the circular on the minimum requirements for feasibility of a bail-in (MaBail-in). BaFin is consulting to extend the circular to institutions and group-affiliated companies for which the resolution plan does not provide for any resolution measures, provided they are part of a resolution group or relevant third-country subsidiaries. The consultation closes on August 18, 2021.
In addition, BaFin published amendments to the minimum requirements for risk management (MaRisk). The amendments to the minimum requirements for risk management implement the European Banking Authority (EBA) guidelines on management of non-performing and forborne exposures (EBA/GL/2018/06), outsourcing (EBA/GL/2019/02), and information and communication technology (ICT) and security risk management (EBA/GL/2019/04). A new version of the banking supervisory requirements for information technology (BAIT) was also released. In the amended BAIT, the supervisory authority describes what framework conditions they can now expect for secure information processing and information technology. Finally, BaFin published the payment service supervisory requirements for information technology (ZAIT), for payment and e-money institutions.
Related Links (in German)
- Press Release on MREL Circular
- MREL Circular
- Press Release on MaBail-In
- Consultation on MaBail-In
- Press Release on MaRisk, BAIT, and ZAIT
- Circular on MaRisk
- Circulars on BAIT
- Circular on ZAIT
Comment Due Date: August 18, 2021
Keywords: Europe, Germany, Banking, MREL, Bail-In, ICT Risk, Resolution Framework, Outsourcing, Technology Risk, NPLs, Forborne Exposures, EBA, BaFin
Previous Article
MAS Revises Notice 637 on Capital Adequacy Requirements for BanksRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.