SRB published presentations made at the 8th Industry Dialogue in Brussels. The Industry Dialogue brings together representatives from EU-level and national banking federations and their associates from Banking Union participating member states, representatives from national resolution authorities, EC, European Parliament, and ECB. The presentations covered the implications of, and the expected work streams, in the context of the newer requirements in the revised Capital Requirements Regulation (CRR) and Bank Resolution and Recovery Directive (BRRD).
SRB will soon publish a Policy Statement, keeping in mind the requirements of CRR2 and BRRD2. Until the transposition of BRRD2, MREL decisions issued by SRB, including any applicable transition periods, will be based on the current legal framework of SRMR1/BRRD1, implemented via the SRB 2018 Minimum Requirement for own funds and Eligible Liabilities (MREL) policy. As per the presentation titled "MREL and Capital Requirements Regulation 2," the new provisions of the Banking Package will also change the SRB reporting needs:
- Additional data will be required on internal MREL and loss-absorbing capacity for resolution planning (set intermediate MREL targets) and monitoring.
- EBA is mandated to draft implementing technical standards on templates and these are to be finalized by around mid-2020.
- SRB needs to bridge the gap in the transitional period.
- SRB will front-load future EBA implementing technical standard templates by launching a new data collection exercise in the transitional period.
Furthermore, for implementing the new resolution planning cycle, SRB will consider 2019 as a transition period to prepare and implement the steady-state cycle; it will aim for decisions, in 2020, that take into account to the extent possible the new legal framework once it enters into force. Bail-in preparation, along with the development of bail-in playbook, is priority in 2019 and 2020. SRB is also working on the “Expectations for banks,” which complements the Resolvability Assessment. This document is intended to make the banks under the direct remit of SRB aware of its general expectations regarding the steps and initiatives that aim to ensure the resolvability of a bank. Individual work programs will be tailored on the basis of a dialog between Internal Resolution Teams and banks. SRB plans to consult the industry on the “Expectations for banks” in the fourth quarter of 2019. The expectations will be phased in over time.
Keywords: Europe, EU, Banking, CRR2, BRRD2, MREL Policy, Resolution Planning, SRMR2, SRB
Previous ArticlePRA Launches 2019 Stress Test Exercise for Life and General Insurers
Next ArticleEBA Updates Data on Deposit Guarantee Schemes in EU
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
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 published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
EBA has decided to phase out the guidelines on legislative and non-legislative moratoria of loan repayments, in accordance with the earlier specified end of September deadline.
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).
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.