Featured Product

    ECB President Answers Queries on Application of EU Taxonomy

    January 22, 2021

    ECB published a letter in which the President Christine Lagarde answered questions, from a Member of the European Parliament, on the application of the EU taxonomy on sustainable finance. In response to the question on the use of the EU taxonomy to estimate the volume of outstanding taxonomy-aligned loans, the ECB President stated that, at present, no infrastructure for collecting and reporting this information exists. In this context, she highlighted that the overall framework of the EU taxonomy is still incomplete and, therefore, not yet ready for use by corporates and banks. The delegated acts outlining the methodologies for calculating and disclosing the alignment with the taxonomy criteria will be gradually adopted in the coming months and the framework will only enter into full force in 2023.

    The second question answered by Ms. Lagarde in the letter concerns what further changes in ECB instruments, EU legislation, or national legislation would be needed to ensure usability of the taxonomy at the loan level. The ECB President highlighted that finalization of the delegated acts of EC on the taxonomy, along with the ongoing work of EBA and Platform on sustainable finance, should provide the main forum to address the most urgent challenges related to the application of the taxonomy to loans and potentially advise on possible future legislative changes. Ms. Lagarde also mentioned that she had discussed the possible use of AnaCredit to collect information on the environmental characteristics of bank loans in her letter to Ernest Urtasun, a Member of the European Parliament. However, AnaCredit constitutes only one of the tools at the disposal of ECB to collect information on the taxonomy-alignment of banks’ lending activities and—depending on the purpose of this data—might not be the most appropriate one. ECB is closely monitoring gaps in the data and possible additional data requirements, while being fully mindful of the need to ensure consistency and avoid unnecessary reporting burdens in the context of a rapidly evolving regulatory framework. While the process of mainstreaming the EU taxonomy across the financial sector is at its inception, ECB is committed to do its part in taking this process forward. As the EU taxonomy framework is implemented and the related data become available, ECB stands ready to make the relevant statistics available to the public. 

    Additionally, in a separate joint statement, EC and ECB highlighted that, following the conclusion of the consultation on January 12, 2021 and a period of preparatory work, ECB will consider whether to start a digital euro project toward mid-2021.

     

    Related Links

    Keywords: Europe, EU, Banking, Sustainable Finance, Taxonomy, ESG, Climate Change Risk, AnaCredit, Taxonomy Regulation, Reporting, Credit Risk, EC, ECB

    Featured Experts
    Related Articles
    News

    BIS Examines Use of Big Data and Machine Learning at Central Banks

    BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.

    March 04, 2021 WebPage Regulatory News
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    ECB Publishes Guide for Determining Penalties for Regulatory Breaches

    ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.

    March 02, 2021 WebPage Regulatory News
    News

    MAS Sets Out Good Practices to Manage Operational Risks Amid COVID

    MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.

    March 02, 2021 WebPage Regulatory News
    News

    ACPR Announces New Data Collection Application for Banks and Insurers

    ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.

    March 02, 2021 WebPage Regulatory News
    News

    BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox

    BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.

    March 02, 2021 WebPage Regulatory News
    News

    EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models

    EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.

    March 01, 2021 WebPage Regulatory News
    News

    SRB Publishes Overview of Resolution Tools Available in Banking Union

    SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.

    March 01, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6655