Featured Product

    EBA Publishes Roadmap on Risk Reduction Measures Package

    November 21, 2019

    EBA published a set of roadmaps outlining the approach and timelines for delivering the mandates stemming from the Risk Reduction Measures Package adopted by the European Council and European Parliament on May 20, 2019. EBA published roadmaps on the delivery of mandates on governance and remuneration, large exposures, Pillar 2, resolution, Pillar 3 disclosures, and supervisory reporting. For each roadmap, EBA has provided tables with information on the deliverables and their original and proposed release timelines.

    The Risk Reduction Package allocates to the EBA more than 100 new mandates under the revised Capital Requirements Directive (CRD 5), Capital Requirements Regulation (CRR 2), and Bank Recovery and Resolution Directive (BRRD 2).  The key mandates are focused in the areas of governance and remuneration, large exposures, resolution, prudential reporting, and disclosures. Most of the mandates are intended to complete and update the Single Rulebook as well at monitoring regulatory practices within the Single Market to ensure effective and consistent implementation of such rules. Out of all the mandates attributed to EBA, a small number of mandates prescribe a deadline of 6-9 months after entry into force of CRD 5 and CRR 2. Timely delivery will remain to be challenge for most of these mandates. In contrast to the area of market risk where consultation papers could be issued before the Official Journal publication of CRR 2, almost all mandates with 6-9 month deadlines are at risk of a 3-9 month delay from the deadline set in the legislative texts.

    For mandates with deadlines within one year or more, EBA will strive to deliver on time for its submission to EC. However, some limited delays are anticipated in the areas of large exposures, interest rate risk in the non-trading book (IRRBB), and minimum requirements for own funds and eligible liabilities (MREL) or bail-in execution due to their complexity and/or contingency to substantive progress in other areas such as Pillar 2 and internal MREL. Likewise, some mandates on reporting may also be delayed as any calibration of requirements is contingent on an agreement on the policy side. The delay can be influenced by the sequencing of work in the event that the content needs to be aligned to other EBA work that is still in progress, such as for guidelines on cooperation between authorities. The detailed roadmaps support the explanatory communication on the actual sequencing and possible delays.

    The key areas covered in the roadmap include the following:

    • In the area of governance, EBA will contribute to optimizing the existing framework with an emphasis on the finalization of the remuneration deliverables.
    • In the area of large exposures, the priority will be to complete the framework where no EBA work exists, namely for determining exposures arising from derivatives.
    • In the area of Pillar 2, EBA will consider how to make the Pillar 2 framework fit for purpose in view of ongoing and new challenges. Proportionality will be strengthened and sustainable finance dimension will be clarified, along with the Pillar 2 capital add-ons.
    • On resolution, the work is intended to facilitate effective resolution planning and preparedness, such as on MREL calibration and monitoring.
    • In the area of supervisory reporting, the aim is to achieve an efficient reporting framework with enhanced proportionality.
    • With the work on disclosure, EBA aims to become the EU-wide Pillar 3 hub, following the completion of the European Centralized Infrastructure for Supervisory Data (EUCLID) project.

    Besides clarifying the sequencing of mandates and the rationale behind their prioritization, the roadmaps aim to provide a preliminary understanding of the mandates combined with some policy guidance. Through this work, EBA will contribute to making the European Single Rulebook more comprehensive, proportionate, and apt to reflect developments in the banking sector.

     

    Related Links

    Keywords: Europe, EU, Banking, CRR 2, CRD 5, BRRD 2, Basel III, Governance, Proportionality, Reporting, Disclosures, Pillar 2, Roadmap, Resolution, Pillar 3, Risk Reduction Package, EBA

    Featured Experts
    Related Articles
    News

    EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio

    EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.

    November 19, 2020 WebPage Regulatory News
    News

    ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs

    In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.

    November 19, 2020 WebPage Regulatory News
    News

    IASB Begins First Phase of Post-Implementation Review of IFRS 9

    IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Report Examines Progress in Resolvability of Systemic Institutions

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.

    November 18, 2020 WebPage Regulatory News
    News

    EBA Benchmarks National Insolvency Frameworks Across EU

    EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Reports Assess Impact of Pandemic on Financial Stability

    FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.

    November 17, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Implementation of Capital Review Changes

    RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.

    November 17, 2020 WebPage Regulatory News
    News

    IASB Announces Andreas Barckow as the New Chair from July 2021

    The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.

    November 17, 2020 WebPage Regulatory News
    News

    HKMA Consults on Capital Rules for Bank Equity Investments in Funds

    HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.

    November 17, 2020 WebPage Regulatory News
    News

    ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA

    ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).

    November 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6153