SRB announced that Bulgaria and Croatia will join the Single Resolution Mechanism, following the ECB decisions to establish close cooperation with the central banks of Bulgaria and Croatia (BNB and HNB, respectively). The ECB decisions 2020/1015 on cooperation with BNB and 2020/1016 on cooperation with HNB have been published in the Official Journal of the European Union. The Governing Council of ECB adopted the decisions following the fulfillment of the necessary supervisory and legislative prerequisites. The Decisions indicate the modalities for the transfer of the supervisory tasks to ECB. The starting date of close cooperation of ECB with BNB and HNB shall be October 01, 2020. The Decisions shall enter into force on the fourteenth day following that of their publication in the Official Journal of the European Union.
Starting from October 01, 2020, ECB will be in charge of the direct supervision of the significant institutions in the Republic of Bulgaria and the Republic of Croatia, the common procedures for all supervised entities, and the oversight of less significant institutions. SRB will become the resolution authority for the significant institutions and all cross-border groups. SRB will also oversee resolution planning for less significant institutions. Banks and certain investment firms in the two countries will also contribute to the Single Resolution Fund, which supports bank resolution. As national resolution authorities of the two Banking Union member states, BNB and HNB will have representatives in Plenary Session and Extended Executive Sessions of SRB with the same rights and obligations as all other members, including voting rights. ECB Banking Supervision, BNB, and HNB are making preparations to ensure a smooth transition to the new supervisory regime. SRB and the national resolution authorities in Bulgaria and Croatia are well-prepared for a smooth transition to the new resolution regime.
In addition, ECB announced inclusion of the Croatian kuna and Bulgarian lev in the Exchange Rate Mechanism (ERM) II. The compulsory intervention rates for these currencies have also been established with effect from July 13, 2020. ECB published application letters from Bulgarian and Croatian Authorities and these letters include the post-entry commitments to be taken at the time of ERM II entry. ECB also published an assessment report on completion of the commitments made by the Republic of Bulgaria and the Republic of Croatia on the macro-prudential toolkit. The assessment report highlights that macro-prudential instruments that impose certain minimum standards on the issuance of new residential mortgage loans can play an important role in counteracting the build-up of systemic risks and strengthening the resilience of the financial system. A strong legal basis can support the effectiveness and active use of borrower-based measures. At the time of expressing the intent to join ERM II, borrower-based measures were not explicitly listed in the macro-prudential framework in Bulgaria and Croatia. In their letter of intent to join ERM II, the Bulgarian and Croatian authorities committed to broaden the macro-prudential toolkit by providing the legal basis for borrower-based measures. ECB concluded in the report that the prior commitment to broadening the macro-prudential toolkit by providing legislative basis for borrower-based measures has been fulfilled.
- SRB Press Release
- Press Release on Cooperation with HNB
- Press Release on Cooperation with BNB
- Press Release on Compulsory Intervention Rates
- Decision 2020/1015
- Decision 2020/1016
- Application Letter from Croatian Authorities (PDF)
- Application Letter from Bulgarian Authorities (PDF)
- Assessment Report on Commitments by Croatia (PDF)
- Assessment Report on Commitments by Bulgaria (PDF)
Effective Date: July 27, 2020
Keywords: Europe, EU, Croatia, Bulgaria, Banking, Close Cooperation, Resolution Planning, Significant Institutions, Less Significant Institutions, ERM II, Systemic Risk, Macro-Prudential Framework, BNB, HNB, ECB
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.