Featured Product

    EP Report Summarizes the Status of Completion of Banking Union in EU

    February 06, 2019

    European Parliament published a report that summarizes the state of play of the various workstreams on completing the Banking Union. This report, which will be regularly updated, covers both risk-sharing (European Deposit Insurance Scheme or EDIS) and risk-reduction measures. The report contains a summary on the status of work on reducing national options and discretions, review of the macro-prudential policy framework, harmonization of national deposit guarantee schemes, progress toward Minimum Requirement for own funds and Eligible Liabilities/total loss-absorbing capacity (MREL/TLAC), operationalizing the Single Resolution Fund (SRF), consistent application of bail-in rules, insolvency law, legislation related to nonperforming loans (NPLs), amendments to the Capital Requirements Directive and Regulation to implement the recent Basel standards, and treatment of sovereign risk.

    With regard to the CRR 2 and CRD 5, the report mentions the following key elements of the proposal implementing the important Basel standards (leverage ratio, net stable funding ratio (NSFR), trading book):

    • A binding 3% leverage ratio
    • A binding NSFR, which will require financial institutions to finance their long-term activities with stable sources of funding
    • Higher more risk-sensitive capital requirements for institutions that trade in securities and derivatives, following the Basel fundamental review of the trading book
    • More proportionate rules for smaller and non-complex banks
    • Rules facilitating lending to small and medium-size enterprises (SMEs) and funding infrastructure projects
    • Clarified conditions for the application of pillar 2 capital add-ons

    The report also provides terms of reference on selected elements for the common backstop to the SRF. As per the report, the Common Backstop would enter into force ahead of 2024 if sufficient progress is achieved in risk-reduction measures, which are to be assessed by 2020. Overall, the phase-in for SRF has been expected during 2016 to 2023. After an eight-year transitional period, the SRF will be fully mutualized, with the target size of approximately EUR 60 billion—that is, 1% of covered deposits of all credit institutions authorized in the Banking Union, at the end of 2023. Furthermore, leaders agreed to the Eurogroup proposals of setting up a High Level Working Group to work on further steps on EDIS, with a report expected by June 2019. The report states that the EC proposal articulates the introduction of EDIS in three stages: the re-insurance phase (2017), the co-insurance phase (2020), the full insurance phase (2024).  


    Related Link: Report

    Keywords: Europe, EU, Banking, CRR/CRD, SRF Backstop, EDIS, Basel III, Banking Union, European Parliament

     

    Featured Experts
    Related Articles
    News

    EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio

    EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.

    November 19, 2020 WebPage Regulatory News
    News

    ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs

    In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.

    November 19, 2020 WebPage Regulatory News
    News

    IASB Begins First Phase of Post-Implementation Review of IFRS 9

    IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Report Examines Progress in Resolvability of Systemic Institutions

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.

    November 18, 2020 WebPage Regulatory News
    News

    EBA Benchmarks National Insolvency Frameworks Across EU

    EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Reports Assess Impact of Pandemic on Financial Stability

    FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.

    November 17, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Implementation of Capital Review Changes

    RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.

    November 17, 2020 WebPage Regulatory News
    News

    IASB Announces Andreas Barckow as the New Chair from July 2021

    The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.

    November 17, 2020 WebPage Regulatory News
    News

    HKMA Consults on Capital Rules for Bank Equity Investments in Funds

    HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.

    November 17, 2020 WebPage Regulatory News
    News

    ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA

    ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).

    November 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6153