EC welcomed the political agreement reached by European Parliament and member states on new rules to promote the EU covered bonds market. An important element of Capital Markets Union, the new rules will provide a source of long-term financing for banks in support to the real economy.
The agreed rules aim to foster the development of covered bonds across EU, particularly in those member states where such markets have not yet developed. They will create a harmonized EU framework without disrupting already established and well-functioning national markets. By putting in place a cost-effective and long-term funding source, these rules will help financial institutions, in particular banks, to finance the real economy across EU. These measures will also increase cross-border flows of capital and investments and promote harmonized prudential rules for those instruments, contributing to financial stability. Further technical work will follow this political agreement so that the European Parliament and the Council can formally adopt the final texts.
As part of the Capital Markets Union action plan, EC is working to develop an integrated European framework for covered bonds, based on high-quality standards and best market practices. EC adopted the following proposal for an enabling EU framework on covered bonds on March 12, 2018 in the context of the broader Capital Markets Union package:
- Directive providing a common definition of covered bonds, defining the structural features of the instrument and identifying the high-quality assets that can be considered eligible in the pool backing the debt obligations. The Directive also establishes a sound special public supervision for covered bonds and sets out the rules allowing the use of the "European Covered Bonds" label.
- Regulation amending the Capital Requirements Regulation (CRR) with the aim of strengthening the conditions for granting preferential capital treatment to covered bonds by adding further requirements.
Keywords: Europe, EU, Banking, Securities, Covered Bonds, Capital Markets Union, CRR, European Parliament, EC
BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).
EBA finalized the guidelines on treatment of structural foreign-exchange (FX) positions under Article 352(2) of the Capital Requirements Regulation (CRR).
FSB published a statement on the impact of COVID-19 pandemic on global benchmark transition.
IAIS published the list of Internationally Active Insurance Groups (IAIGs) publicly disclosed by group-wide supervisors.
FED has temporarily revised the reporting form on consolidated financial statements for holding companies (FR Y-9C; OMB No. 7100-0128).
EC launched a consultation on the review of the key elements of Solvency II Directive, with the comment period ending on October 21, 2020.
ECB launched a consultation on the guide that sets out supervisory approach to consolidation projects in the banking sector.
PRA published a letter that builds on the expectations set out in the supervisory statement (SS3/19) on enhancing banks' and insurers' approaches to managing the financial risks from climate change.
US Agencies (Farm Credit Administration, FDIC, FED, FHFA, and OCC) finalized changes to the swap margin rule to facilitate implementation of prudent risk management strategies at banks and other entities with significant swap activities.
IAIS published technical specifications, questionnaires, and templates for 2020 Insurance Capital Standard (ICS) and Aggregation Method data collections.