Featured Product

    SRB Holds Annual Conference, Reflects on Turning Policy into Action

    December 10, 2019

    SRB published a report on its fourth annual conference that was held on October 10, 2019 in Brussels. This year, the discussions focused on the implementation of bank resolution policy. The discussions identified several relevant issues, including completing the Banking Union, the lack of a functioning Capital Markets Union, the need for a more robust framework around liquidity in resolution, and the newfound information technology issues that impede the efficiency of resolution and operational continuity.

    Elke König, the SRB Chair, highlighted that an updated Minimum Requirement for own funds and Eligible Liabilities (MREL) policy is to be released in early 2020. In terms of the future work areas, the SRB Chair mentioned the:

    • Need for a backstop in the Single Resolution Fund or SRF
    • Lingering issue of liquidity in resolution
    • Harmonization of insolvency regimes
    • Need for a functioning Capital Markets Union

    With these needs clearly defined, the conference set an ambitious “to do” list of what should be accomplished now if resolvability is to be successful in future. In comparing the EU to other jurisdictions, the lack of a "single European market" was repeatedly flagged as a cause for concern. With investors still viewing banks on national terms (that is, German versus Italian, instead of European), EU is not an appealing market to investors. While it is for firms to make themselves resolvable, the resolution authorities need to be clear on what this means. Also identified was an overall need for greater clarity and, with it, increased transparency.

    Furthermore, in his speech, Dietrich Domanski, the Secretary-General of FSB, focused on elements needed to maintain operational continuity when turning resolution policy into action. In this context, he mentioned the gaps identified in the eighth FSB report on implementation of resolution reforms in the areas of achieving a balance between prepositioned and nonprepositioned total loss-absorbing capacity (TLAC) resources, successful execution of a TLAC bail-in transaction, and liquidity in resolution. According to José Manuel Campa, the EBA Chair, progress has been slow and “... work still needs to be done both from the banks’ point of view and the authorities’ point of view. Only a few authorities have published guidelines on operational continuity.” EBA, he said, is working with supervisory authorities to help them create clear and common guidelines for banks on what is expected—for instance in terms of concretely identifying and mapping critical functions—across resolution authorities.

     

    Related Links

    Keywords: Europe, EU, Banking, Banking Union, SRF Backstop, Single Resolution Board, Annual Conference, Resolution Framework, MREL, Bail-In, Liquidity in Resolution, SRB

    Featured Experts
    Related Articles
    News

    MAS Amends Notice 610 on Reporting Templates for Banks in Singapore

    MAS published amendments to Notices 610 and 1003 related to submission of statistics and returns, along with the reporting templates and frequently asked questions (FAQs) associated with these Notices.

    January 24, 2020 WebPage Regulatory News
    News

    HKMA Updates Policy Module on Supervisory Review Process

    HKMA is issuing, by notice in the Gazette, revised versions of two Supervisory Policy Manual modules as statutory guidelines under section 7(3) of the Banking Ordinance. The Supervisory Policy Manual modules are CA-G-5 on “Supervisory Review Process” and SB-2 on “Leveraged Foreign Exchange Trading.”

    January 24, 2020 WebPage Regulatory News
    News

    PRA Amends Pillar 2 Capital Framework for Banks

    PRA published the policy statement PS2/20 that contains the final amendments to the Pillar 2 framework and provides feedback to responses to the consultation paper CP5/19 on updates related to Pillar 2 capital framework.

    January 23, 2020 WebPage Regulatory News
    News

    FED Proposes to Revise Information Collection Under Market Risk Rule

    FED proposed to revise and extend, for three years, FR 4201, which is the information collection under the market risk capital rule.

    January 22, 2020 WebPage Regulatory News
    News

    HKMA Consults on Stay Rules on Financial Contracts Under FIRO

    HKMA published proposals for making rules related to contractual stays on termination rights in financial contracts for authorized institutions under FIRO or the Financial Institutions (Resolution) Ordinance (Cap. 628).

    January 22, 2020 WebPage Regulatory News
    News

    MAS Amends Notices on Minimum Liquid Asset Requirements for Banks

    MAS published amendments to Notices 1015, 613, and 649 related to the minimum liquid assets (MLA) requirements.

    January 21, 2020 WebPage Regulatory News
    News

    APRA Publishes Submission on Fintech and Regtech

    APRA published its submission, to the Senate Select Committee, on financial technology and regulatory technology.

    January 21, 2020 WebPage Regulatory News
    News

    OSFI to Implement Operational Risk Capital Rules for Banks in Q1 2022

    OSFI decided to move domestic implementation of the revised Basel III operational risk capital requirements from the first quarter of 2021 to the first quarter of 2022.

    January 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guideline on Threshold for Credit Obligations Past Due

    ECB published a draft guideline, along with the frequently asked questions (FAQs), on the definition of the materiality threshold for credit obligations past due for less significant institutions.

    January 20, 2020 WebPage Regulatory News
    News

    OSFI Consults on Instruction Guide for Termination of Pension Plan

    OSFI is consulting on draft revisions to the instruction guide for termination of a defined benefit pension plan.

    January 20, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4526