EC Approves Prolongation of Danish Resolution Scheme for Small Banks
EC authorized, under EU State aid rules, the prolongation of a Danish resolution scheme for small banks with total assets below EUR 3 billion. The objective of the scheme is to facilitate the work of the Danish resolution authorities to wind up a small bank, should a concrete case and need arise for it. The scheme is open to banks that would be found to be in distress by the competent national authorities. The scheme is being prolonged until September 30, 2020. The scheme was initially approved in September 2010 and has been prolonged and amended several times since then, most recently in August 2018.
The objective of the scheme is to safeguard financial stability and minimize economic losses, when a bank becomes unable to meet the conditions set for its operation by the Danish Financial Supervisory Authority. The scheme provides for an orderly winding up of the failing bank, transferring its assets and part of its liabilities to a bridge bank to be set up under the aegis of the Danish Financial Stability Company. The Authority would provide capital, and, if necessary, liquidity to the bridge bank. EC found the scheme to be in line with the EU State aid rules, in particular the 2013 Banking Communication on crisis rules for banks and the EU banking rules. EC found the scheme to be in line with its Guidance Communications on state aid to overcome the financial crisis. In particular, the aid is limited to the minimum necessary to ensure an orderly winding-up.
Related Links
Keywords: Europe, EU, Denmark, Banking, Financial Stability, Resolution, Small Banks, EC, DFSA
Previous Article
US Agencies Reaffirm the Role of Supervisory GuidanceRelated Articles
BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
EBA Publishes Multiple Regulatory Updates for Regulated Entities
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
APRA Consults on Prudential Standard for Operational Risk
The Australian Prudential Regulation Authority (APRA) is seeking comments, until October 21, 2022, on the introduction of CPS 230, which is the new cross-industry prudential standard on operational risk management.
EC Amends Rule on Securitizations; ESRB Updates Reciprocation Measures
The European Commission published a Delegated Regulation 2022/1301 on the information to be provided in accordance with the simple, transparent, and standardized (STS) notification requirements for on-balance-sheet synthetic securitizations.
APRA Announces Revisions to Capital Framework for Banks
The Australian Prudential Regulation Authority (APRA) is announced revisions to the capital framework for authorized deposit-taking institutions to implement the "unquestionably strong" capital ratios and the Basel III reforms.
EBA Examines Remuneration Data and Use of Large Exposure Exemptions
The European Banking Authority (EBA) published a report that examines the use of certain exemptions included in the large exposures regime under the Capital Requirements Regulation (CRR).
UK Authorities Publish Discussion Paper on Critical Third Parties
The Bank of England (BoE), the Prudential Regulation Authority (PRA), and the Financial Conduct Authority (FCA) published a joint discussion paper that sets out potential measures to oversee and strengthen the resilience of services provided by critical third parties to the financial sector in UK.
BoE Issues Update on Ongoing Data Transformation Program
The Bank of England (BoE) issued a communication to firms to provide an update on the progress of the joint data transformation program—which is being led by BoE, the Financial Conduct Authority (FCA), and the industry—for the financial sector in UK.
EBA Issues Draft Methodology and Templates for 2023 Stress Tests
The European Banking Authority (EBA) published the draft methodology, templates, and template guidance for the European Union-wide stress test in 2023.
EBA Issues SREP Guidelines and Standards for Investment Firms
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) jointly published the final guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) for investment firms.
