EC Notice on Clarification of Provisions of Bank Resolution Framework
EC published a notice in the Official Journal of the European Union on the interpretation of certain legal provisions of the revised bank resolution framework. The notice is in response to questions raised by the authorities of member states in the context of the resolution framework for banks. In this notice, EC adopts answers related to legal acts, including the revised Bank Recovery and Resolution Directive (BRRD2) and Single Resolution Mechanism Regulation (SRMR2). This notice complements the notice adopted by EC, in September 2020, with the answers to the questions raised by authorities of member states on the interpretation of certain legal provisions of BRRD 2 and its interactions with SRMR and the Capital Requirements Directive and Regulation.
The notice addresses questions on the following topics:
- Minimum requirement for own funds and eligible liabilities
- Contractual recognition of bail-in
- Write-down or conversion of capital instruments and eligible liabilities
- Contractual recognition of resolution stay powers
- Selling of subordinated eligible liabilities to retail clients
- Power to prohibit certain distributions provided in Article 16A BRRD
- Resolution planning
- Insolvency proceedings in respect of institutions and entities that are not subject to resolution action
- Powers to suspend payment or delivery obligations under Articles 33A and 69
The banking reform package includes changes to the bank resolution framework through BRRD2 and SRMR2. Member states must transpose the provisions of BRRD2 into their national law by December 28, 2020. This notice clarifies the provisions already contained in the applicable legislation. It does not extend in any way the rights and obligations deriving from such legislation nor introduce any additional requirements of the concerned operators and competent authorities. The notice is intended to assist authorities of member states in the transposition of EU legislation into national law and in the implementation of relevant legal provisions.
Related Links
Keywords: Europe, EU, Banking, BRRD2, CRR2, SRMR2, CRD5, Resolution Framework, Q&A, Basel, Regulatory Capital, EC
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
CPMI and IOSCO Report on Implementation Monitoring of PFMI in BrazilRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.