EC Amends Regulation on Liquidity Coverage Requirements for Banks
EC published the text of the Commission Delegated Regulation on liquidity coverage requirement for credit institutions. This Regulation amends the Delegated Regulation (EU) 2015/61 to supplement the Capital Requirements Regulation or CRR (EU Regulation No 575/2013). The EC consultation on this regulation ended on February 21, 2018 and EC received 19 responses to the consultation. This Commission Delegated Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
The key changes relate to the following:
- Calculation of expected liquidity outflows and inflows on repurchase agreements, reverse repurchase agreements, and collateral swaps transactions with the international liquidity standard
- Treatment of certain reserves held with third-country central banks
- Waiver of the minimum issue size for certain non-EU liquid assets
- Application of the unwind mechanism for the calculation of the liquidity buffer
- Integration in the LCR Delegated Regulation of the new criteria for simple, transparent, and standardized securitizations
Given the limited amount of changes to the existing LCR Delegated Regulation, it is proposed to adopt the amendments to that Regulation rather than the whole new text. This would maintain the structure of the original LCR Delegated Regulation. In accordance with Article 462 of the CRR, EC remains empowered to review the Delegated Regulation for an indeterminate period of time.
Related Links
Effective Date: OJ+20 Days
Keywords: Europe, EU, Banking, LCR, CRR, Liquidity Risk, EC
Previous Article
PRA Issues Policy Statement on Matching Adjustment Under Solvency IIRelated Articles
ECB Allows Temporary Relief in Leverage Ratio Amid COVID-19 Pandemic
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs Launch Survey on Templates for Product Disclosures Under SFDR
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB Proposes Integrated Reporting Framework to Reduce Burden for Banks
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
ECB Finalizes Methodology to Assess CCR and A-CVA Risk of Banks
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA Provides Opinion on Definition of Credit Institution in CRR
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA Consults on Alignment of Daily Liquidity Report for Banks
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED Releases Scenarios for Second Round of Stress Tests on Banks
FED released hypothetical scenarios for a second round of stress tests for banks.
FED to Temporarily Revise FR Y-14 Reports to Conduct Stressed Analysis
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.
FED Revises Information Collection Under Market Risk Capital Rule
FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).
EBA Seeks Input on ESG Disclosure Practices of Banks
EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.
