May 06, 2019

The SRB Chair Elke König published an article that outlines the potential resolution framework priorities for the next EU legislature, just as the mandate of the current European Commission and Parliament draws to an end. This article was published in The Eurofi Magazine.

In the article, she mentions that, from the perspective of SRB, the finalization of the Banking Package represents a milestone in strengthening the resolution framework. The partial harmonization of the creditor hierarchy was another step forward. Building on these achievements, SRB is hopeful that the next legislature will deliver on the implementation, review, and completion of the resolution framework. She then outlined the issues that legislators in the next mandate could address to the complete framework:

  • Addressing asymmetries between the EU resolution regime and national insolvency frameworks
  • Aligning the conditions to determine that a bank is "failing or likely to fail" with the criteria for liquidation at national level
  • Addressing the issue of the requirements for burden sharing under the 2013 Banking Communication of EC, which apply in cases of precautionary recapitalization and liquidation aid, not being entirely in line with those for bail-in under the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism Regulation (SRMR), potentially giving wrong incentives when compared to resolution
  • Fully harmonizing the ranking of creditors in insolvency, as Directive 2017/2399 focused only on unsecured debt instruments in the hierarchy, while national differences remain on the ranking of the rest of the creditors

She highlighted that deepening the Economic and Monetary Union in EU requires the completion of the Banking Union and of the Capital Markets Union. A common framework for banks’ insolvency would constitute a significant advance on both paths. Both strong Banking Union and European capital market can play an important role in the creation of the needed liquidity for capital instruments and Minimum Requirement for own funds and Eligible Liabilities (MREL). Therefore, work on these must continue to progress in the new EU legislature.

 

Related Link: Article by SRB Chair

 

Keywords: Europe, EU, Banking, BRRD, SRMR, Directive 2017/2399, MREL, Resolution Framework, Creditor Hierarchy, Banking Union, SRB

Related Articles
News

ESAs Amend Technical Standards on Mapping of ECAIs Under CRR

ESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).

May 20, 2019 WebPage Regulatory News
News

OCC Consults on Information Collection for Home Mortgage Disclosures

OCC is soliciting comment on the revision of the information collection titled “Regulation C—Home Mortgage Disclosure.” OCC also notes that it has sent the collection to OMB for review.

May 20, 2019 WebPage Regulatory News
News

EIOPA Updates Q&A on Regulations in May 2019

EIOPA published additional questions and answers (Q&A) on guidelines, directives, and regulations applicable to insurers in Europe.

May 17, 2019 WebPage Regulatory News
News

FSB Publishes Update on Meeting of RCG for Americas

FSB published a summary of the meeting of its Regional Consultative Group (RCG) in Americas.

May 17, 2019 WebPage Regulatory News
News

IASB Issues Work Plan and Meeting Updates for May 2019

IASB published an updated work plan, along with the update of its meeting in May 2019.

May 17, 2019 WebPage Regulatory News
News

FCA Publishes Its Business Plan for the Coming Year

FCA published its Business Plan, which sets out the main areas of focus and priorities for 2019/20.

May 17, 2019 WebPage Regulatory News
News

CFTC Proposes to Amend Derivatives Clearing Organization Regulations

CFTC proposed amendments to certain regulations applicable to registered derivatives clearing organizations (DCOs) under Part 30 of the CFTC regulations.

May 16, 2019 WebPage Regulatory News
News

APRA Licenses Societe Generale As Foreign Deposit-Taking Institution

APRA granted Societe Generale a license to operate as a foreign authorized deposit-taking institution under the Banking Act of 1959.

May 16, 2019 WebPage Regulatory News
News

EBA Provides Updates on Its Work on Basel III Impact Assessment in EU

EBA is working to finalize the impact assessment on implementation of Basel III standards, in response to the EC call for advice, which was received on May 04, 2018.

May 16, 2019 WebPage Regulatory News
News

ISDA Publishes Two Consultations on Benchmark Fallbacks

ISDA published two consultations on benchmark fallbacks, the comment periods for which expire on July 12, 2019.

May 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3097