Featured Product

    EC Revises Standards on Methodology for G-SII Identification

    March 29, 2021

    EC published, in the Official Journal of the European Union, the final Commission Delegated Regulation 2021/539 on regulatory technical standards for specification of the methodology for the identification of global systemically important institutions (G-SIIs) and for the definition of subcategories of G-SIIs. Regulation 2021/539 amends the Delegated Regulation 1222/2014 supplementing the Capital Requirements Directive (CRD IV or 2013/36/EU). Regulation 2021/53 shall enter into force on the day following that of its publication in the Official Journal, with certain provisions applying from December 01, 2021.

    The revisions to these regulatory technical standards are a result of the revised framework that BCBS introduced in July 2018 to identify global systemically important banks and of the new requirements laid down in the fifth Capital Requirements Directive (CRD5 or 2019/878). The data collection established in accordance with the revised methodology, which includes the trading volume indicator, will start in the first quarter of 2022. G-SIIs will, therefore, be identified on the basis of the revised framework for the first time in the last quarter of 2022. To align the application of the provisions of the revised methodology with the dates of application of the revised methodology, the provisions of Regulation 2021/539 that reflect the changes in the revised methodology should apply from December 01, 2021.

    Additionally, Article 131 of CRD IV was amended by CRD5 to introduce to CRD IV an additional overall score for G-SIIs with the cross-border activities’ indicator excluding the cross-border activities across the member states participating in the Single Resolution Mechanism (SRM). That additional overall score was introduced to reflect the ability to resolve cross-border groups within the European Banking Union in an orderly manner. Thus, it is appropriate to amend the scope of the cross-border activity indicator to reflect that change. Consequently, Regulation 2021/539 is amending Regulation 1222/2014 to make this change.

    In Regulation 2021/539, Article 4 on "Identification Procedure" states that the relevant authority shall calculate the scores of the relevant entities that are included in the sample notified by EBA and which are authorized in its jurisdiction not later than September 01 of each year. Where the relevant authority, in the exercise of sound supervisory judgment, reallocates a G-SII from a lower subcategory to a higher subcategory or designates a relevant entity as a G-SII in accordance with points (a) or (b) of Article 131(10) of CRD IV, respectively, the relevant authority shall provide EBA with a detailed statement in written form on the reasons for its assessment not later than November 01 of each year. Where the relevant authority, in the exercise of sound supervisory judgment, reallocates a G-SII from a higher subcategory to a lower subcategory in accordance with point (c) of Article 131(10) of CRD IV, the relevant authority shall provide EBA with a detailed statement in written form on the reasons for its assessment not later than September 30 of each year.

     

    Related Links

    Effective Date: March 30, 2021

    Keywords: Europe, EU, Banking, CRR, Basel, CRD, Regulation 2021/539, G-SII, Regulatory Capital, EC

    Featured Experts
    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521