ESRB Receives Notification on Level of Systemic Risk and O-SII Buffers
PRA, National Bank of Slovakia, FIN-FSA, and Central Bank of Hungary (MNB) have notified EBA, ECB, and ESRB about their decisions on the level of systemic risk buffers to be applied to institutions. Additionally, National Bank of Slovakia and FIN-FSA have notified these EU authorities about their decisions on the identification of other systemically important institutions (O-SII) and the activation of O-SII buffer.
PRA notified the mentioned EU authorities about the systemic risk buffer rates for ring-fenced banks (RFBs) and large building societies. PRA has set systemic risk buffer rates for RFBs in five RFB sub-groups—Lloyds Banking Group RFB sub-group, Royal Bank of Scotland RFB sub-group, Barclays RFB sub-group, HSBC RFB sub-group, and Santander UK RFB sub-group—and these systemic risk buffer rates apply to all exposures, on a sub-consolidated basis. PRA has set a systemic risk buffer rate for the Nationwide Building Society at 1%, which applies to all exposures, on a consolidated basis. The systemic risk buffers will apply in full from July 30, 2019. This is the PRA’s first setting of the SRB rates and these rates are expected to be applied until December 31, 2020. PRA expects to review the SRB rates annually, to announce the SRB rates by December 15 of each year, and to require institutions to apply the rates on an ongoing basis by January 01 of the second year ,following the calendar year when the rates were announced. PRA will base its decision of SRB rates on the total assets of the RFB or the building society at the end of the previous calendar year.
Additionally, FIN-FSA notified that it will continue with the existing systemic risk buffers. The systemic risk buffer applies to all credit institutions authorized in Finland at the level of 1.0 % while the systemic risk buffer has been specifically set at 3.0% for Nordea Group, 2.0% for OP-Group, and 1.5% for Municipality Finance Plc. The systemic risk buffer is applied on a consolidated level. Additionally, FIN-FSA assessed the appropriateness of the O-SII buffer as required by law and decided to maintain the level of O-SII buffer at 2.0% for Nordea Group and OP-Group and at 0.5% for Municipality Finance Plc.
Related Links
- Notification by PRA on Systemic Risk Buffer (PDF)
- Notification by FIN-FSA on Systemic Risk Buffer (PDF)
- Notification by National Bank of Slovakia on Systemic Risk Buffer (PDF)
- Notification by Central Bank of Hungary on Systemic Risk Buffer (PDF)
- Notification by FIN-FSA on O-SII (PDF)
- Notification by National Bank of Slovakia on O-SII (PDF)
Keywords: Europe, UK, Finland, Slovakia, Hungary, Banking, Systemic Risk Buffer, O-SII, Macro-Prudential Measures, Systemic Risk, FIN-FSA, PRA, EBA, ECB, ESRB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
IMF Technical Notes Assess Financial Sector in PolandRelated Articles
OSFI Consults on Revisions to BCAR and Leverage Requirements Returns
OSFI proposed revisions to the Basel Capital Adequacy Reporting (BCAR) and leverage requirements returns for the 2023 reporting, with the comment period ending on July 09, 2021.
EBA Seeks Views on Revisions to Nonperforming Loan Data Templates
EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates.
Bundesbank Updates Requirements Documentation for AnaCredit Reporting
Bundesbank updated AnaCredit reporting requirements for banks, with reference to the Notice 8001/2020.
CBUAE Issues Regulation for Low-Risk Specialized Banks
CBUAE has issued a regulation that introduces the licensing and supervision framework for low-risk, specialized banks.
APRA Proposes Guidance to Support Prudential Standard on Remuneration
APRA is consulting on CPG 511—the draft Prudential Practice Guide on remuneration for banks, insurers, and superannuation licensees—with the comment period ending on July 23, 2021.
MAS Announces Grant Scheme to Spur Adoption of Regtech Solutions
MAS announced a new RegTech grant scheme and an enhancement of the Digital Acceleration Grant (DAG) scheme to accelerate technology adoption in the financial sector.
PRA Review Finds Most Banks Compliant with Regulatory Reporting Rules
PRA published a letter that sets out findings from the 2020 Internal Audit Review of the Collections function of a sample of non-systemic banks and building societies.
EIOPA Launches Consultation on Interbank Offered Rate Transitions
EIOPA launched a consultation on the Interbank Offered Rate (IBOR) transitions, in context of the EU Benchmarks Regulation.
IFRS Issues Proposals Related to New Sustainability Standards Board
The Trustees of the IFRS Foundation proposed amendments to the Constitution of the IFRS Foundation to accommodate the potential formation of the new International Sustainability Standards Board within the governance structure of the organization.
BCB Amends Rules on Open Banking and Proposes ESG Disclosure Rules
BCB amended the resolution that establishes technical requirements and operational procedures for the implementation of open banking in Brazil, with the amended resolution entering into force on its publication date.
