Featured Product

    EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation

    May 23, 2022

    The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR). The European Systemic Risk Board (ESRB) also published Recommendation ESRB/2022/3 on the reciprocation of macro-prudential measures in Belgium, France, Lithuania, Luxembourg, Netherlands, Norway, and Sweden. In addition, the European Central Bank published the template for calculating the interest rates applicable to repayments at maturity or voluntary repayment of the third series of targeted longer-term refinancing operations (TLTRO III).

    Liquidity Coverage Requirements

    Regulation 2022/786 is amending the Regulation 2015/61 to supplement CRR with regard to the liquidity coverage requirement for credit institutions. Regulation 2015/61 is being amended to better allow the credit institutions issuing covered bonds to comply with the general liquidity coverage requirement for a 30 calendar day stress period and with the cover pool liquidity buffer requirement of holding liquid assets to cover net liquidity outflows over the next 180 days. To clarify some of the existing rules and to align the text of Regulation 2015/61 with the definitions laid down in the CRR and the Covered Bonds Directive (2019/2162), some additional changes were needed. The new regulation is introducing a new amendment to the encumbrance criterion under the general liquidity coverage requirement. This new amendment would treat liquid assets held as part of the cover pool liquidity buffer as unencumbered up to the amount of net liquidity outflows stemming from the associated covered bond program. Moreover, it is necessary to lay down monetization rules for the assessment of liquid assets held in a cover pool liquidity buffer. Regulation 2022/786 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union and shall apply from July 08, 2022.

    ESRB Recommendation

    Via the Recommendation ESRB/2022/3, which amends Recommendation ESRB/2015/2, the General Board of ESRB has decided to include an additional macro-prudential measure in the list of macro-prudential measures that are recommended for reciprocation under Recommendation ESRB/2015/2. The additional macro-prudential measure imposes a systemic risk buffer rate on all internal ratings-based retail exposures to natural persons secured by residential immovable property for which the collateral is located in Belgium. The Recommendation ESRB/2022/3 also amends the text on the reciprocation of certain macro-prudential measures from France, Luxembourg, Netherlands, Norway, and Sweden. Recommendation ESRB/2022/3 has been published in the Official Journal of the European Union.  


    Related Links

    Keywords: Europe, EU, Banking, CRR, Basel, Credit Risk, Regulatory Capital, Liquidity Risk, LCR, Covered Bond, Covered Bond Directive, Belgium, France, Lithuania, Luxembourg, Norway, Netherlands, Sweden, Systemic Risk, Reciprocity, Macro-Prudential Policy, IRB Approach, Systemic Risk Buffer, TLTRO III, Reporting, ECB, EC, ESRB, Headline

    Featured Experts
    Related Articles

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582