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
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Previous ArticleOSFI Consults on Regulatory Forms and Instructions for IFRS 17
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.