Featured Product

    EBA Updates Regulatory Standards on Own Funds and Eligible Liabilities

    May 26, 2021

    EBA published a report on the final draft regulatory technical standards on own funds and eligible liabilities. With the revised Capital Requirements Regulation (CRR2) introducing new criteria and requirements for eligible liabilities, the amended regulatory technical standards capture several aspects of eligible liabilities as well as the changes to the own funds framework. The final standards have been sent to EC for their adoption as EU regulations that will be directly applicable throughout the EU.

    The revised regulatory technical standards:

    • Align existing provisions to changes introduced in the revised CRR in the area of own funds, with this being the case for provisions related to the regime of supervisory prior permission for the reduction of own funds
    • Specify some of the newly introduced criteria for eligible liabilities instruments derived from the own funds regime; these include the absence of direct or indirect funding for the acquisition of ownership of eligible liabilities, the absence of incentives to redeem, and the need for the resolution authority’s prior permission for the reduction of eligible liabilities. For some of these aspects, the mandates attributed to EBA explicitly require to ensure full alignment between eligible liabilities and own funds
    • Increase the calibration of the threshold for determining the predetermined amount for the general prior permission for reducing eligible liabilities instruments from 3% to 10% of the total amount of outstanding eligible liabilities instruments, post feedback received during the consultation
    • Recognize some relief for the renewal of general prior permission both for own funds and eligible liabilities and for introducing a proportionate approach for liquidation entities for which their minimum requirement for own funds and eligible liabilities (MREL) does not exceed the loss absorption amount

    EBA has updated the regulatory technical standards on own funds, in accordance with the original regulatory technical standard mandates granted to EBA under Articles 28(5), 29(6), 52(2), 76(4), 78(5), and 79(2) of the Capital Requirements Regulation (575/2013). The provisions of the regulatory technical standards related to eligible liabilities have been developed in accordance with Articles 72b(7) and 78a(3) of CRR. 

     

    Related Links

    Keywords: Europe, EU, Banking, Regulatory Technical Standards, Own Funds, CRR2, BRRD, MREL, TLAC, Eligible Liabilities, G-SII, Basel, Regulatory Capital, EBA

    Featured Experts
    Related Articles
    News

    APRA Issues Interim Update to Policy Priorities for 2021 and Beyond

    In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.

    September 24, 2021 WebPage Regulatory News
    News

    EBA Publishes Single Rulebook Q&A, Launches Transparency Exercise

    The European Banking Authority (EBA) published answers to 29 questions in the Single Rulebook Question and Answer (Q&A) tool in September.

    September 24, 2021 WebPage Regulatory News
    News

    EC Adopts Solvency II and Resolution Rules Package for Insurers

    The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.

    September 22, 2021 WebPage Regulatory News
    News

    OCC Issues Booklets on Regulatory Reporting and Earnings

    The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.

    September 22, 2021 WebPage Regulatory News
    News

    ECB Sets Out Results of Economy-Wide Climate Stress Tests

    The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.

    September 22, 2021 WebPage Regulatory News
    News

    EBA Examines Implications of Increasing Use of Digital Platforms in EU

    The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.

    September 21, 2021 WebPage Regulatory News
    News

    HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact

    The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.

    September 21, 2021 WebPage Regulatory News
    News

    ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures

    The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.

    September 21, 2021 WebPage Regulatory News
    News

    BIS Quarterly Review Discusses Developments in Fintech and ESG Space

    BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.

    September 20, 2021 WebPage Regulatory News
    News

    BCBS to Consult on Supervisory Practices for Climate Risks by Year-End

    The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards

    September 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7495