Featured Product

    European Council Adopts Changes to CRR2 to Ease Impact of COVID Crisis

    June 24, 2020

    European Council published the final text of the regulation that implements targeted adjustments to the Capital Requirements Regulations (CRR and CRR2) to help credit institutions in managing the economic stress arising from the COVID-19 pandemic. European Council has published this final text of revised regulation prior to its publication in the Official Journal of the European Union. Earlier, on June 19, 2020, European Parliament had adopted this package of measures, which will become applicable on the day following that of their publication in the Official Journal of the European Union.

    This banking package provides targeted and exceptional legislative changes to Capital Requirements Regulations to maximize the capacity of banks to lend money and support households and businesses to recover from the COVID-19 crisis. The targeted amendments in this regulation concern:

    • changes to the minimum amount of capital that banks are required to hold for non-performing loans (NPLs) under the "prudential backstop". The preferential treatment of NPLs guaranteed by export credit agencies will be extended to other public-sector guarantors in the context of measures aimed at mitigating the economic impact of the COVID-19 pandemic.
    • the extension by two years of transitional arrangements related to the implementation of the international accounting standard IFRS 9. This will allow banks to mitigate the potential negative impact of a likely increase in banks' provisions for expected credit losses.
    • the temporary reintroduction of a prudential filter for sovereign bond exposures, which will mitigate the impact of the current volatility of financial markets on public debt.
    • additional flexibility for supervisors to mitigate negative effects of the extreme market volatility observed during the COVID-19 pandemic, in particular by excluding "overshootings" that occurred in 2020 and 2021 in banks' internal models for market risks.
    • targeted changes to the calculation of the leverage ratio (that is, the ratio between banks' capital and its exposures) and a delay in the introduction of the leverage ratio buffer by one year to January 2023.
    • transitional arrangements for exposures to national governments and central banks denominated in a currency of another member state, to support funding options in non-euro member states mitigating the consequences of the COVID-19 pandemic.
    • the earlier introduction of some capital relief measure for banks under CRR 2, most notably with respect to preferential treatment of certain loans backed by pensions or salaries and their SMEs and infrastructure loans, thus encouraging the credit flow to pensioners, employees, businesses and infrastructure investments.

     

    Related Links

    Keywords: Europe, Banking, Basel, CRR2, IFRS 9, NPLs, Sovereign Bonds, Leverage Ratio, COVID-19, European Parliament, European Council

    Featured Experts
    Related Articles
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    MAS Amends Notices on Risk-Based Capital Adequacy Requirements

    MAS revised Notices 637 and 1111 on the risk-based capital adequacy requirements, along with Notice 656 on the exposures to single counterparty groups for banks incorporated in Singapore.

    June 14, 2021 WebPage Regulatory News
    News

    ISDA Consults on Implementation of Fallbacks for Certain Swap Rates

    ISDA is consulting on the implementation of fallbacks for the sterling LIBOR ICE Swap Rate and for the USD LIBOR ICE Swap Rate.

    June 11, 2021 WebPage Regulatory News
    News

    US Agencies Set Out Unified Agenda for Planned Regulatory Actions

    SEC announced that the Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions.

    June 11, 2021 WebPage Regulatory News
    News

    BIS and BoE Launch Innovation Hub in London

    BIS and BoE launched the BIS Innovation Hub Center in London, which is the fourth new Innovation Hub Centre to be opened in the past two years.

    June 11, 2021 WebPage Regulatory News
    News

    ESRB Recommends Reciprocation of Certain Macroprudential Measures

    ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, France, Luxembourg, Norway, and Sweden.

    June 11, 2021 WebPage Regulatory News
    News

    MAS Amends Regulatory Notices Applicable to Banks in Singapore

    MAS revised multiple notices that are applicable to banks and merchant banks in Singapore and have been issued pursuant to the Banking Act (Cap 19).

    June 11, 2021 WebPage Regulatory News
    News

    EC Publishes Regulation on Key Aspects of Implementation of SA-CCR

    EC published the Delegated Regulation 2021/931, which supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to the regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver.

    June 10, 2021 WebPage Regulatory News
    News

    BCBS Consults on Prudential Treatment of Cryptoasset Exposures

    BCBS is consulting on preliminary proposals for the prudential treatment of cryptoasset exposures of banks.

    June 10, 2021 WebPage Regulatory News
    News

    EBA Revises List of Validation Rules for Reporting

    EBA issued a revised list of validation rules under the implementing technical standards on supervisory reporting.

    June 10, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7097