BaFin Updates Bail-in Requirements and FAQ on COVID Measures
BaFin recently updated the frequently asked questions(FAQ) on COVID-19 measures for credit risk. In addition, post a consultation, BaFin finalized the enhanced version of a circular on the minimum requirements for information systems for the feasibility of a bail-in. This circular replaces Circular 05/2019 (A) on minimum requirements for the feasibility of a bail-in, which was published in July 2019. The circular is aimed at all institutions under the direct responsibility of BaFin as the national resolution authority, for which no insolvency scenario has been defined as a resolution strategy.
BaFin had published the original circular on the minimum requirements for the feasibility of a bail-in on July 04, 2019. The consultation on the changes that had been proposed in this circular closed on December 16, 2020. The Circular addresses requirements for the management information systems of the concerned institutions. The requirements are intended to ensure provision of the information necessary for an effective and efficient implementation of the resolution instruments. The revised version of the circular also includes requirements for the technical and organizational equipment to ensure that the information can be provided within 24 hours of being requested by the resolution authority. Minimum requirements for the feasibility of a bail-in have been expanded in certain other areas too. The main extensions relate to additional data points for the further development of the external bail-in implementation, the extension to all bail-in-capable liabilities (taking into account the principle of proportionality), and the inclusion of a catalog of frequently asked questions.
Related Links (in German)
Keywords: Europe, Germany, Banking, FAQ, Credit Risk, Bail In, Resolution Planning, Basel, COVID-19, Resolution Framework, BaFin
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
UK Authorities Welcome FSB Review of their Remuneration RegimeRelated Articles
EC Rule on Contractual Recognition of Write Down and Conversion Powers
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
APRA Issues Further Guidance on Application of Securitization Standard
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
SRB Provides Update on Approach to Prior Permissions Regime
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
EBA Finalizes Guidance to Assess Breaches of Large Exposure Limits
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
EBA Revises Guidelines on Stress Tests of Deposit Guarantee Schemes
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
HKMA Endorses Industry Guidance to Support LIBOR Transition
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
OCC Issues Booklet on Supervision of Problem Banks
The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.
