The European Banking Authority (EBA) proposed to amend the implementing technical standards on currencies with constraints on the availability of liquid assets in the context of the liquidity coverage ratio (LCR). The proposed amendments remove Norwegian Krone (NOK) from the list of currencies with constraints and, consequently, no currency will be recognized as having constraints on the availability of liquid assets. The consultation period ends on October 16, 2021. The final amending implementing technical standards are foreseen to be submitted to the European Commission by the end of the year.
EBA has been also tasked to amend the existing regulatory technical standards specifying the use of derogations and the conditions of their application following the addition of a new derogation, with a concomitant need to update the corresponding implementing technical standards on the effective list of currencies with constraints, which currently consists of one single currency, the Norwegian Krone. EBA is proposing to remove the Norwegian Krone from the list of currencies with constraints because an updated data analysis demonstrates that there is no longer a shortage in the supply of liquid assets in the Norwegian Krone. Since this amendment will lead to an empty list, to keep its regulatory efforts proportionate to their impact, EBA will not update the corresponding regulatory technical standards. Such an update will be proposed if during a future assessment EBA observes that a currency will have to be added to the list.
As part of this consultation, the draft implementing technical standards have been developed on the basis of the Capital Requirements Regulation (CRR), as amended by the revised CRR, which mandates EBA to list the currencies with constraints on the availability of liquid assets and specify the derogations and conditions of their application. The implementing technical standards are to be read in conjunction with the regulatory technical standards (Commission Delegated Regulation 2016/709) stemming from an EBA mandate in Article 419(5) of the CRR.
Comment Due Date: October 16, 2021
Keywords: Europe, EU, Banking, LCR, CRR, Norwegian Krone, NOK, Implementing Technical Standards, Liquidity Risk, Basel, EBA
Previous ArticleBCBS Publishes Basel III Monitoring Updates in July 2021
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.