Featured Product

    EBA to Issue Stress Test Results in July, Consults on SREP Guidelines

    EBA announced that individual results for the banks participating in the 2021 EU-wide stress test, along with a report summarizing the results in aggregate terms, will be published on July 30, 2021. In addition, EBA launched a public consultation on the revised guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) and supervisory stress testing. The comprehensive revisions are intended to implement recent amendments to the Capital Requirements Directive (CRD5) and the Capital Requirements Regulation (CRR2) as well as to align the guidelines with other regulatory developments and best supervisory practices. The comment period for the proposed guidelines ends on September 28, 2021.

    SREP is an ongoing supervisory process bringing together findings from all supervisory activities into a comprehensive supervisory overview of an institution. The guidelines being revised are aimed to achieve convergence of practices followed by competent authorities across EU, in their SREP and supervisory stress testing processes. This ongoing review of the SREP guidelines affects all main SREP elements, including business model analysis, assessment of internal governance and institution-wide control arrangements, assessment of risks to capital and capital adequacy to cover these risks, and assessment of liquidity and funding risks and adequacy of liquidity resources to cover such risks. The main amendments implementing the requirements laid down in the CRD5 and CRR2 include the following:

    • Reviewing institutions’ categorization and application of the minimum engagement model to reflect the new definitions on small and non-complex as well as large institutions, thus better embedding the proportionality principle
    • Incorporating an assessment of money laundering and terrorist financing (ML/TF) risks, in line with the EBA opinion on how to take into account ML/TF risks in the SREP published in November 2020
    • Reviewing the provisions on Pillar 2 capital add-ons and the Pillar 2 guidance in accordance with Articles 104a and 104b of CRD4, to ensure that they reflect a purely micro-prudential perspective
    • Providing clarifications on the assessment of the risk of excessive leverage and the related Pillar 2 capital add-ons and the Pillar 2 guidance to reflect the separate stack of own funds requirements based on the leverage ratio
    • Adjusting the requirements for the assessment of the interest rate risk in the non-trading book as well as assessing liquidity risk and liquidity adequacy to align them with the current regulatory framework

    EBA is consulting only on changes to the existing SREP guidelines and plans to finalize the guidelines once the consultation responses have been assessed. On publication of the final guidelines, the existing SREP guidelines will be repealed and replaced.

     

    Related Links

    Comment Due Date: September 28, 2021

    Keywords: Europe, EU, Banking, SREP, Stress Testing, CRR2, CRD5, Basel, Pillar 2, Regulatory Capital, IRRBB, Liquidity Risk, 2021 Stress Test, ML/TF Risk, EBA

    Featured Experts
    Related Articles
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Publishes Methodological Guide to Mystery Shopping

    The European Banking Authority (EBA) published a methodological guide to mystery shopping.

    July 21, 2021 WebPage Regulatory News
    News

    APRA Issues Update on Capital Reform Policy Settings for Banks

    The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.

    July 21, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.

    July 21, 2021 WebPage Regulatory News
    News

    BoE Announces Changes to Validation Rules for Form BTL

    The Bank of England (BoE) published questions and answers (Q&A) on OSCA to BEEDS migration for statistical reporting as well a presentation from the project overview session held with statistical reporters.

    July 20, 2021 WebPage Regulatory News
    News

    BCBS Proposes Changes to Process for Reviewing G-SIB Methodology

    The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology.

    July 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7281