Featured Product

    ESRB Reviews Macro-Prudential Policy in EU in 2019

    April 29, 2020

    ESRB published a report that examines developments in the macro-prudential policy framework in EU during 2019. The report discusses the macro-prudential measures—for both banks and non-banks—that were adopted or were in place in 2019. Non-banking sectors covered include insurance, pension schemes, asset management and investment funds, and financial market infrastructure. The report also provides an update on the release of the countercyclical capital buffers (CCyBs) and the re-calibration or removal of other capital buffers for banks in the light of the COVID-19 pandemic. In 2019, most macro-prudential measures were taken to address arising or prevailing cyclical risks in the banking sector.

    The report describes the changes in policy frameworks at both the EU and the national levels. It outlines the national macro-prudential measures to target risks in banking that were adopted in 2019. It first reviews certain trends seen across different instruments and then turns to specific instruments. Further, the report covers risks beyond banks and the related policies. Some member states passed legislation to broaden the toolkit available in their jurisdictions and developed analytical frameworks. This included bringing a macro-prudential perspective to micro-prudential regulation; designing recovery and resolution frameworks; and developing macro-prudential tools to target systemic risk.

    The report also consists of four special features. The first feature (Special Feature A) describes the new role that ESRB has been given by the Capital Requirements Directive (CRD) 5 and Capital Requirements Regulation (CRR) II with respect to coordinating macro-prudential policies and acting as a notification hub. The second feature (Special Feature B) sets out the framework for monitoring material third countries for the purpose of potentially setting a CCyB for exposures of EU banks to such countries. The third feature (Special Feature C) describes the analytical framework for assessing cross-border effects of macro-prudential policy as developed by ECB. The fourth and final feature (Special Feature D) considers the intricate relationship between real estate taxation and macro-prudential policy.

    With more structural and cyclical measures in place, 17 out of 31 European Economic Area member states adopted fewer new domestic macro-prudential measures in 2019, compared to 2018. In 2019, several member states tightened their CCyBs, in line with the broader trend of macro-prudential tightening to address cyclical risks. Seventeen European Economic Area member states had a systemic risk buffer in place in 2019. The revised CRD abolishes the use of the systemic risk buffer for systemically important institution risks and some member states will, therefore, have to revise their capital buffer policies by the end of 2020 when the revised CRD enters into force. By March 31, 2020, Finland and the Netherlands had reduced the level of the other systemically important institution (O-SII) buffer for one bank in their respective jurisdictions, in response to the COVID-19 pandemic. 

     

    Related Links

    Keywords: Europe, EU, Banking, Systemic Risk, CCyB, Macro-prudential Policy, Systemic Risk Buffer, COVID-19, Residential Real Estate, CRD5, CRR2, ESRB

    Featured Experts
    Related Articles
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    News

    FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates

    The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.

    December 20, 2022 WebPage Regulatory News
    News

    FSB Reports Assess NBFI Sector and Progress on LIBOR Transition

    The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.

    December 20, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8697