ESRB published a recommendation on the exchange and collection of information for macro-prudential purposes. This information is for the branches of credit institutions that have their head office in another member state or in a third country (ESRB/2019/18). The recommendations are related to the cooperation and exchange of information on a need-to-know basis, changes to the Union legal framework, and guidelines form and the monitoring of, the exchange of information.
Recommendation A on cooperation and exchange of information on a need-to-know basis. It is recommended that the relevant authorities exchange information deemed necessary for the discharge of their tasks related to the adoption and/or activation of macro-prudential policy measures or for other financial stability tasks, in an effective and efficient manner. It is also recommended that the relevant authorities establish memoranda of understanding or other forms of voluntary arrangements for cooperation and exchange of information among themselves—or with a relevant authority of a third country—where considered necessary and appropriate by all parties involved to facilitate the exchange of information.
Recommendation B on changes to the Union legal framework. It is recommended that EC assess whether any impediments exist in Union legislation, which prevent authorities entrusted with the adoption and/or activation of macro-prudential policy measures or with other financial stability tasks from having or obtaining the necessary information on branches to carry out those functions or fulfill those tasks. It is recommended that EC propose that Union legislation be amended to remove any such impediments, where EC concludes, as a result of its assessment, that such impediments exist.
Recommendation C on guidelines for and the monitoring of exchange of information. It is recommended that EBA issue guidelines in accordance with Recommendation A for the exchange of information between relevant authorities regarding branches of credit institutions having their head office in another member state, which should include a list of information to be exchanged, as a minimum, on a need-to-know basis, and within the limits of applicable Union and national laws. The list should include, as a minimum, information items from each of the following categories:
- At the branch level—Assets and exposures with breakdowns, breakdowns of assets regarding borrower-based measures, liabilities with breakdowns, intra-financial sector exposures, and information necessary to identify other systemically important institutions (O-SIIs)
- At the parent group or parent institution level—Own funds and leverage; funding and liquidity; and relevant information on branches, such as business strategy and certain elements of recovery plans of credit institutions and supervisory assessments that are relevant.
It is also recommended that EBA monitor on a regular basis, in cooperation with ESRB, the effectiveness and efficiency of the exchange of information between relevant authorities. By December 31, 2023, EBA is requested to deliver to ESRB and to the European Council a report on the implementation of Recommendation C.
Keywords: Europe, EU, Banking, Recommendation, ESRB 2019/18, Systemic Risk, Macro-Prudential Policy, Own Funds, Recovery Plans, EC, EBA
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.
FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.