Featured Product

    EC Report Reviews Application of BRRD and SRMR in EU

    April 30, 2019

    EC adopted a report that reviews the application of Bank Recovery and Resolution Directive (BRRD) and Single Resolution Mechanism Regulation (SRMR) in EU. These legal acts are key elements of the legislation that was adopted in the wake of the financial crisis and constitute the core building blocks of the Banking Union. Given that the two legislative instruments have thus far have been applied in a limited number of cases, the report concludes that more time is needed for their assessment before any amendments are proposed.

    In its assessment, EC took stock of the implementation of the resolution legislation and its application to concrete banking cases. The legislation has been applied only in a very limited number of cases, out of which only one case concerned the resolution of an institution under SRMR. A number of these cases dealt with “legacy issues,” which accumulated during the financial crisis or before. Moreover, the provisions of the bail-in tool and the establishment of the Single Resolution Board became applicable only as of January 01, 2016. Additionally, other elements—such as resolution planning for larger and complex institutions and the provisions concerning MREL—require a phasing in to be fully implemented. Not to mention that certain crucial parts of the framework—including the provisions on Minimum Requirement for own funds and eligible Liabilities (MREL), moratorium powers, and the recognition of liabilities governed by third-country law—are still in the process of being amended and, once in place, transition periods will apply. After considering all these factors, the report concludes that more time is needed to fully assess the implications of the legislation. 

    EC will, however, continue to monitor the application of the resolution framework and further assess the identified issues. EC will also engage in a comprehensive discussion of the topics identified in this report with respect to BRRD and SRMR (as well as issues that may emerge from application of the resolution framework) with experts appointed by the European Parliament, member states, and all relevant stakeholders. This report has been prepared in accordance with the Article 129 of BRRD and Article 94 of SRMR, which require EC to review the application of the resolution framework and to submit a report to the European Parliament and the Council. The reports on the application of these legal instruments were due by June and December 2018, respectively. Due to the close links between these instruments, it was though to be appropriate to conduct a joint review for BRRD and SRMR. 

     

    Related Links

    Keywords: Europe, EU, Banking, BRRD, SRMR, MREL, Banking Union, Resolution Framework, SRB, EC

    Related Articles
    News

    PRA Consults on Implementation of Certain Provisions of CRD5

    PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).

    July 31, 2020 WebPage Regulatory News
    News

    EIOPA Report Identifies Key Financial Stability Risks for Insurers

    EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for First Quarter of 2020

    EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Issues Updates on Stress Test Exercise for Banks in EU

    EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.

    July 30, 2020 WebPage Regulatory News
    News

    PRA Proposes Guidance Related to Matching Adjustment under Solvency II

    PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.

    July 30, 2020 WebPage Regulatory News
    News

    MAS Issues Guidance on Dividend Distributions by Banks

    MAS published a statement guidance on dividend distribution by banks.

    July 30, 2020 WebPage Regulatory News
    News

    APRA Updates Guidance on Capital Management for Banks

    APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.

    July 29, 2020 WebPage Regulatory News
    News

    FSB Report Reviews Macro-Prudential Framework and Tools in Germany

    FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.

    July 29, 2020 WebPage Regulatory News
    News

    EBA Urges Firms to Finalize Preparations for End of Brexit Transition

    EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.

    July 29, 2020 WebPage Regulatory News
    News

    SRB on Operational Continuity in Resolution and FMI Contingency Plans

    SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.

    July 29, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5606