Featured Product

    EC Issues Consolidation Rule and ESRB Updates Reciprocation Measures

    April 28, 2022

    The European Commission (EC) published the Delegated Regulation 2022/676 on the regulatory technical standards specifying the conditions in accordance with which consolidation is to be carried out in the cases referred to in Article 18 of the Capital Requirements Regulation (CRR). Additionally, the European Systemic Risk Board (ESRB) published Recommendation ESRB/2022/1 on the reciprocation of macro-prudential measures in Belgium, France, Lithuania, Luxembourg, Netherlands, Norway, and Sweden.

    Regulation 2022/676

    This regulation specifies the conditions for the application of the different methods of prudential consolidation and the conditions in accordance with which the consolidation is to be carried out in cases:

    • of groups of undertakings that are related within the meaning of Article 22(7) of the Capital Requirements Directive (CRD IV)
    • of institutions or financial institutions managed by an undertaking included in the consolidation together with one or more undertakings not included in the consolidation
    • of participations or capital ties in institutions or financial institutions other than those referred to Article 18(1) and (4) of CRR
    • where an institution exercises a significant influence over one or more institutions or financial institutions, but without holding a participation or other capital ties in those institutions
    • where two or more institutions or financial institutions are placed under single management other than pursuant to a contract, clauses of their memoranda or articles of association
    • where a subsidiary or an undertaking in which an institution holds a participation is not an institution, financial institution or ancillary services undertaking

    Regulation 2022/676 also sets out the conditions for inclusion in consolidated Common Equity Tier 1, Additional Tier 1, and Tier 2 capital of instruments owned by persons other than the undertakings included in the prudential scope of consolidation. The regulatory technical standards have taken into consideration the Basel Committee on Banking Supervision (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. Regulation 2022/676 shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

    ESRB Recommendation

    The Recommendation ESRB/2022/1, which amends Recommendation ESRB/2015/2, has been published in the Official Journal of the European Union. Via this recommendation, the General Board of ESRB decided to include

    • macro-prudential measure imposing a minimum average risk-weight for credit institutions authorized in the Netherlands and using the internal ratings-based approach, in the list of macro-prudential measures that are recommended for reciprocation under Recommendation ESRB/2015/2.
    • Lithuanian macro-prudential measure for systemic risk buffer rate in the list of macro-prudential measures that are recommended for reciprocation under Recommendation ESRB/2015/2
    • amended text on the reciprocation of certain macro-prudential measures from Belgium, France, Luxembourg, Norway, and Sweden

     

    Related Links

     

    Keywords: Europe, EU, Belgium, France, Lithuania, Luxembourg, Norway, Netherlands, Sweden, Banking, CRR, Basel, CRD IV, Prudential Consolidation, Regulatory Technical Standards, Regulatory Capital, Systemic Risk, Reciprocity, Macro-Prudential Policy, IRB Approach, Systemic Risk Buffer, EC, ESRB

    Featured Experts
    Related Articles
    News

    ISSB Sustainability Standards Expected to Become Global Baseline

    The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.

    September 18, 2023 WebPage Regulatory News
    News

    IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance

    Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.

    September 18, 2023 WebPage Regulatory News
    News

    BCBS Assesses NSFR and Large Exposures Rules in US

    The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.

    September 14, 2023 WebPage Regulatory News
    News

    Global Agencies Focus on ESG Data, Climate Litigation and Nature Risks

    At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.

    September 14, 2023 WebPage Regulatory News
    News

    ISSB Standards Shine Spotlight on Comparability of ESG Disclosures

    The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures

    August 22, 2023 WebPage Regulatory News
    News

    EBA Issues Several Regulatory and Reporting Updates for Banks

    The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.

    August 10, 2023 WebPage Regulatory News
    News

    BCBS Proposes to Revise Core Principles for Banking Supervision

    The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.

    August 04, 2023 WebPage Regulatory News
    News

    US Proposes Final Basel Rules, Transition Period to Start in July 2025

    The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.

    August 04, 2023 WebPage Regulatory News
    News

    FSB Report Outlines Next Steps for Climate Risk Roadmap

    The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.

    August 04, 2023 WebPage Regulatory News
    News

    EBA Plans on Ad-hoc ESG Data Collection and Climate Scenario Exercise

    The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.

    July 31, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8931