January 30, 2018

CBRC published a joint comment letter on the proposals from EC to further strengthen the resilience of EU banks; this relates particularly to Article 21b of the Capital Requirement Directive (CRD) that requires non-EU groups above certain threshold to establish intermediate EU parent undertakings (IPU) in the EU. This joint comment letter by the People’s Bank of China and CBRC was sent to the EC, the Council of the EU, and the European Parliament.

CBRC welcomed the presidency compromise from the EU Council on November 27, 2017; specifically the removal of the requirement that any global systemically important institutions (G-SII) from a third-country group, regardless of the number of institutions it has, shall establish an IPU in the EU. However, certain aspects of the proposed amendments to the CRD, along with the respective comments from the Council of EU and ECB, need further consideration. CBRC has raised concerns on the following issues:

  • Chinese authorities have not imposed any comparable IPU requirements on foreign financial institutions in China.
  • Considering that the intended supervisory benefits may not be proportionate to the potential compliance cost, CBRC suggested reconsideration of the threshold of EUR 30 billion for the proposed EU IPU requirements (as a reference, the US Intermediate Holding Company (IHC) requirements have a threshold of USD 50 billion of total assets in the US, excluding those of branches).
  • CBRC also suggested reconsideration on the appropriateness of calculating total assets, including those of branches, and incorporating existing branches into the new IPU.
  • The supervision of financial holding companies and mixed financial holding companies needs clarification.

 

Related Link: Joint Comment Letter

Keywords: Asia Pacific, Europe, China, Banking, CRD, IPU Proposal, Basel III, G-SII, EC, CBRC

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476