EBA published a discussion paper exploring the ways to enhance the Bank Recovery and Resolution Directive (BRRD) framework on early intervention measures. In this paper, EBA introduces some of the most important implementation issues in the area of early intervention measures. The paper intends to provide preliminary views on how these implementation issues could be addressed and offers stakeholders the opportunity to provide early input. Comment period for the discussion paper will end on September 25, 2020.
Early intervention is one of the three pillars of the BRRD, with preparation (recovery and resolution planning) and resolution being the other two pillars. BRRD introduced early intervention measures to expand the existing set of powers available to supervisors toward institutions in difficulties. While monitoring the application of early intervention measures in 2015-2018, EBA observed a limited use of early intervention measures across EU during that period. Instead of early intervention measures, the competent authorities often preferred to apply other pre-BRRD supervisory powers available to them. EBA investigated the reasons for these supervisory practices. While recognizing that early intervention measures could be successfully implemented under the existing regulatory framework, EBA identified some challenges in their application. The paper discuses some of the most important implementation issues in the area of early intervention measures. The objective is to further enhance crisis management tools available for competent authorities, in addition to the well-established and widely used supervisory powers laid down in the Capital Requirements Directive (CRD) and in the Single Supervisory Mechanism Regulation.
The discussion paper also presents the results of the survey on the application of early intervention measures that EBA conducted among the competent authorities in the first half of 2019. This monitoring covered three aspects: the existing practices in policy implementation, the empirical data on application of early intervention measure across EU, and the key challenges in applying early intervention measure identified by the competent authorities. The key challenges faced by supervisors in the application of the current regulatory framework on the early intervention measures have been grouped into the following categories:
- Interaction between early intervention measure and other supervisory powers (for example, measures according to Article 104 CRD)
- Disclosure and reputation risks related to possible obligations to disclose the application of early intervention measures to market participants
- Specification of early intervention triggers
Comment Due Date: September 25, 2020
Keywords: Europe, EU, Banking, BRRD, Early Intervention Measures, CRD, Disclosures, Resolution Framework, Crisis Management Framework, EBA
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)