Featured Product

    SRB Issues Blueprint for Review of Crisis Management Framework

    May 18, 2021

    SRB issued a bi-annual note aimed at reporting to the Eurogroup on the progress of SRB activities in the areas of resolution planning, resolvability, and minimum requirement for own funds and eligible liabilities (MREL); the latest policy developments; and the Single Resolution Fund. SRB also published a blueprint on key considerations for the review of the crisis management and deposit insurance framework in EU.

    The blueprint on review of the crisis management and deposit insurance framework highlights that, in any reform of the crisis management and deposit insurance framework in EU, the completion of the Banking Union must be a priority. The European Deposit Insurance Scheme (EDIS) is indispensable to enhance financial stability, to overcome the sovereign-bank doom-loop, and to avoid financial fragmentation in the Banking Union. As long as there is no full-fledged EDIS, the originally envisaged third pillar, the Banking Union will remain incomplete and exposed to financial stability issues. The review should enshrine the hybrid model of EDIS into law, but with a time-bound transition period (for example, five years) toward full mutualization or steady state. In the interim period, SRB could use transfer tools at the Banking Union level (the combined use of Single Resolution Fund and Deposit Guarantee Scheme could be explored) to find potential acquirers, maintain the franchise value of failing banks under the SRB remit, and play a coordinating role  in the application of national Deposit Guarantee Scheme alternative measures. In the steady state, SRB should act as the central authority with powers to manage all bank failures in the Banking Union, handling both EDIS and the Single Resolution Fund.

    The bi-annual note on SRB progress highlights that SRB is in the concluding phase of the 2020 resolution planning cycle. Despite the challenges connected to COVID-19 outbreak, SRB kept the 2020 cycle on track and has recently started the 2021 resolution planning cycle. with respect to the minimum requirement for own funds and eligible liabilities (MREL) instruments issued in the UK, SRB will consider liabilities governed by UK law without a contractual bail-in recognition clause as eligible for MREL, if they otherwise satisfy applicable MREL criteria and were issued on or before November 15, 2018. This exemption will apply until June 28, 2025 to ensure alignment with the prudential grandfathering of the requirement to introduce contractual recognition clauses in own funds instruments (as per Article 494b CRR). Furthermore, within the existing legal framework, SRB has enhanced its approach to the Public Interest Assessment by the consideration of systemic-wide events in resolution planning, which will be applied in 2021. Going forward, SRB will work to deepen the analysis on the Public Interest Assessment dimensions related to critical functions at regional level and the protection of covered depositors; work in these areas will be completed before the 2022 resolution planning cycle. SRB is also preparing, among others things, the Backstop Facility Agreement, the Parallel Facility Agreement, and the termination of the Loan Facility Agreements.

     

    Related Links

    Keywords: Europe, EU, Banking, Single Resolution Fund, SRF, Resolution Planning, MREL, Crisis Management Framework, Deposit Insurance, Resolution Framework, EDIS, SRB

    Related Articles
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    News

    APRA Licenses Two More Banks, Reduces Committed Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) updated the list of authorized deposit-taking institutions, granting license to Barclays Bank PLC and Crédit Agricole Corporate and Investment Bank to operate as foreign authorized deposit-taking institutions under the Banking Act 1959.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7866