Featured Product

    EBA Finalizes Standards on Methods of Prudential Consolidation

    April 15, 2021

    EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR). These standards are intended to ensure that the appropriate method of prudential consolidation is applied for the calculation of CRR requirements on a consolidated basis. As per EBA, entities to be included in the scope of prudential consolidation are financial institutions (as defined in point 26 of Article 4(1) of CRR) and ancillary services undertakings (as defined in point 18 of Article 4(1) of CRR).

    These final draft regulatory technical standards specify the conditions for the application of the different methods of prudential consolidation. The regulatory technical standards have taken into consideration the BCBS guidelines on the identification and management of step-in risk and, therefore, include several indicators that should be assessed in order to identify the undertakings that can lead to step-in risk. Following the approval of the Risk Reduction Measures Package, the draft regulatory technical standards have been revised to reflect the changes introduced in the CRR and in the Capital Requirements Directive (CRD) as well as the feedback received during the public consultation. The main changes deal with the newly introduced Article 18(8) of the CRR, allowing competent authorities to extend prudential consolidation to certain non-financial undertakings in case there is a substantial risk of step-in. In this regard, building on the initial proposal presented in the consultation paper, these draft regulatory technical standards include several step-in risk indicators to be considered by competent authorities in assessing whether an undertaking should be fully or proportionally consolidated for prudential purposes.

     

    Related Links

    Keywords: Europe, EU, Banking, CRR, Basel, Step-in Risk, Prudential Consolidation, Regulatory Technical Standards, Proportionality, Risk Reduction Package, EBA

    Related Articles
    News

    NGFS Updates Address Short-Term Climate Scenarios and Transition Plans

    The Network for Greening the Financial System (NGFS) is exploring the development of short-term climate scenarios to complement its existing scenario framework of long-term climate scenarios.

    May 31, 2023 WebPage Regulatory News
    News

    ISSB Updates Address ESG Issues while IASB Consults on Impairments

    The International Sustainability Standards Board (ISSB) is seeking feedback, until August 09, 2023, on the exposure draft that sets out the methodology proposed by ISSB to amend the Sustainability Accounting Standards Board (SASB) Standards' metrics

    May 30, 2023 WebPage Regulatory News
    News

    ESRB Publishes Report on Cryptos and DeFi; ECB Updates on Digital Euro

    The European Systemic Risk Board (ESRB) published a report that outlines the systemic implications of crypto markets and proposes policy options to address the risks stemming from crypto-assets and decentralized finance or DeFi.

    May 26, 2023 WebPage Regulatory News
    News

    EU Agencies Issue Updates on DORA, ESAP, and Crowdfunding Regulation

    The European Supervisory Authorities (ESAs) published a discussion paper on their joint advice to the European Commission (EC) on proposals to specify criteria for critical information and communication technology (ICT) third-party service providers

    May 26, 2023 WebPage Regulatory News
    News

    UK Authorities Issue Updates, Finalize Policy on Model Risk Management

    The Prudential Regulation Authority (PRA) finalized the model risk management principles for banks, the policy statement PS5/23 on risks from contingent leverage, and PS4/23 on moving senior managers regime forms from the PRA Rulebook.

    May 25, 2023 WebPage Regulatory News
    News

    APRA Revises Implementation Timeline for Operational Risk Standard

    The Australian Prudential Regulation Authority (APRA) updated the implementation date of the new cross-industry prudential standard CPS 230 on operational risk management

    May 25, 2023 WebPage Regulatory News
    News

    BCBS Consults on Basel FAQs and Amendments, Issues Other Updates

    The Basel Committee on Banking Supervision (BCBS) published a report assessing implementation of the global Basel standards on net stable funding ratio (NSFR) and large exposures (LEX) in South Africa

    May 25, 2023 WebPage Regulatory News
    News

    EBA Announces Multiple Regulatory and Reporting Updates in April 2023

    The European Banking Authority (EBA) published consultations on the amendments to the guidelines on risk-based anti-money laundering and countering the financing of terrorism (AML/CFT) supervision

    May 24, 2023 WebPage Regulatory News
    News

    FSB Issues Statement on USD LIBOR Transition, Issues Other Updates

    The Financial Stability Board (FSB) released a report that offers insights into how financial institutions incorporate climate-related metrics into their compensation frameworks

    May 23, 2023 WebPage Regulatory News
    News

    ACPR Issues Updates on Reporting by Banks and on DLT Pilot Scheme

    The French Prudential Supervisory Authority (ACPR) published reporting updates for the banking sector

    May 22, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8896