EC published the Delegated Regulation (EU) 2019/348 on regulatory technical standards specifying the criteria for assessing the impact of the failure of an institution on financial markets, on other institutions, and on funding conditions. Regulation (EU) 2019/348 supplements the Bank Recovery and Resolution Directive or BRRD (Directive 2014/59/EU) of the European Parliament and Council. Regulation (EU) 2019/348 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
BRRD requires the member states to ensure that competent and resolution authorities assess the impact that the failure of an institution could have due to a number of factors specified in that Article 4(1) of the Directive. This involves conducting assessment based on certain qualitative and quantitative criteria. The assessment based on qualitative criteria should only be conducted where the assessment on the basis of quantitative criteria does not lead to the conclusion that, in the light of the impact that the institution's failure could have, full obligations, rather than merely simplified obligations, are required. To ensure a convergent and effective application of Regulation (EU) 2019/348, competent and resolution authorities should assess the quantitative criteria against an EU common threshold in the form of a total quantitative score. Competent and resolution authorities should calculate that total quantitative score in accordance with a set of indicators, using the values from the applicable supervisory reporting framework laid down in Implementing Regulation (EU) No 680/2014.
The first four articles of Regulation (EU) 2019/348 describe the qualitative and quantitative assessment criteria for credit institutions and investment firms. The regulation also addresses assessments for institutions belonging to groups (Article 5), promotional banks (Article 6), and credit institutions subject to an orderly winding-up process (Article 7). Considering the different purposes of recovery and resolution planning, competent and resolution authorities from the same member state may reach different conclusions about the application of Articles 1 to 4, 6 and 7, in which case they shall regularly assess whether those different conclusions remain justified. The first two Annexes to this regulation cover indicators and/or weights for calculating the total quantitative score for credit institutions and investment firms. The values of the indicators shall be determined on the basis of the indicators specified in Annex III. Regulation (EU) 2019/348 is based on the draft regulatory technical standards submitted by EBA to EC.
Effective Date: March 24, 2019
Keywords: Europe, EU, Banking, BRRD, Regulation 2019/348, Recovery and Resolution, Regulatory Technical Standards, EBA, EC
Previous ArticleAPRA Consults on Options to Revise the Prudential Standard LPS 117
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.
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).
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED released hypothetical scenarios for a second round of stress tests for banks.
PRA published updates in relation to the 2021 Supervisory Benchmarking Portfolio exercise.
FED adopted a proposal to extend for three years, with revision, the capital assessments and stress testing reports (FR Y-14A/Q/M; OMB No. 7100-0341).
HKMA revised the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.