BaFin Issues Regulatory Updates for Banks in Germany
The Federal Financial Supervisory Authority of Germany (BaFin) published a circular on determination of the minimum requirement for own funds and eligible liabilities (MREL) for institutions and group companies, for which the wind-up plan provides for liquidation in the context of insolvency proceedings. This circular will replace the previous MREL circular that was published in August 2019. BaFin also launched a consultation (12/2021) on revisions to the circular on the minimum requirements for feasibility of a bail-in (MaBail-in). BaFin is consulting to extend the circular to institutions and group-affiliated companies for which the resolution plan does not provide for any resolution measures, provided they are part of a resolution group or relevant third-country subsidiaries. The consultation closes on August 18, 2021.
In addition, BaFin published amendments to the minimum requirements for risk management (MaRisk). The amendments to the minimum requirements for risk management implement the European Banking Authority (EBA) guidelines on management of non-performing and forborne exposures (EBA/GL/2018/06), outsourcing (EBA/GL/2019/02), and information and communication technology (ICT) and security risk management (EBA/GL/2019/04). A new version of the banking supervisory requirements for information technology (BAIT) was also released. In the amended BAIT, the supervisory authority describes what framework conditions they can now expect for secure information processing and information technology. Finally, BaFin published the payment service supervisory requirements for information technology (ZAIT), for payment and e-money institutions.
Related Links (in German)
- Press Release on MREL Circular
- MREL Circular
- Press Release on MaBail-In
- Consultation on MaBail-In
- Press Release on MaRisk, BAIT, and ZAIT
- Circular on MaRisk
- Circulars on BAIT
- Circular on ZAIT
Comment Due Date: August 18, 2021
Keywords: Europe, Germany, Banking, MREL, Bail-In, ICT Risk, Resolution Framework, Outsourcing, Technology Risk, NPLs, Forborne Exposures, EBA, BaFin
Previous Article
MAS Revises Notice 637 on Capital Adequacy Requirements for BanksRelated Articles
EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
BCBS and EBA Publish Results of Basel III Monitoring Exercise
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
PRA Updates Timeline for Final Basel III Rules, Issues Other Updates
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
US Treasury Sets Out Principles for Net-Zero Financing
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
EC Launches Survey on G7 Principles on Generative AI
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
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.
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.
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.
