Featured Product

    EBA Updates Methodology to Assess Third-Country Equivalence

    February 21, 2022

    The European Banking Authority (EBA) updated two questionnaires for assessing regulatory and supervisory frameworks of third countries, as part of the methodology for assessing third-country equivalence. Following the entry into force, in June 2021, of the most recent updates of the Capital Requirements Directive and Regulation (CRD5 and CRR2), EBA has updated the questionnaires to reflect provisions introduced by the new capital requirements framework.

    The first updated questionnaire on initial screening is focused on the most relevant requirements and principles and identifying similar laws in place (first step questionnaire). The second updated questionnaire allows for a granular and more detailed investigation of third-country frameworks by identifying and mapping similar rules and provisions to the CRR and analyzing the divergences (second step questionnaire). The updated questionnaires will replace the old ones and will be used to conduct future assessments of the regulatory and supervisory framework of third countries. The CRR foresees that certain exposures to entities in non-European Union countries can be treated, in terms of risk-weights, as exposures in member states of European Union, provided that the European Commission adopts an implementing decision determining that the country’s prudential requirements are equivalent to the ones in the European Union.

    In the past years, EBA has been assisting the European Commission in preparing their decisions on the equivalence of prudential regimes applicable in third-country jurisdictions. On request by the European Commission, EBA assesses the supervisory and regulatory requirements of third country jurisdictions. The methodology used for this type of assessment is based on the first- and second-step questionnaires. The main goal of equivalence is to manage effectively and facilitate cross-border activity of financial market players in a sound prudential environment, as third countries adhere and adopt the same high standards of prudential rules that are in force within the European Union. EBA carries out two types of equivalence assessments: equivalence of the regulatory and supervisory framework and equivalence of confidentiality and professional secrecy. The equivalence assessment process is a key component for the establishment of cooperation agreements with third countries. Such cooperation agreements cover areas such as the exchange of information with third-country authorities relating to equivalence assessment and monitoring as well as cooperation with the European Union authorities with regard to the supervision, crisis management, and resolution aspects.

     

    Related Links

     

    Keywords: Europe, EU, Banking, Equivalence Regime, Questionnaire, CRR, CRD, Basel, Third Country Equivalence, EC, EBA

    Featured Experts
    Related Articles
    News

    CFPB Finalizes Rule on Small Business Lending Data Collection

    The Consumer Financial Protection Bureau (CFPB) published a final rule that sets out data collection requirements on small business lending, under section 1071 of the Dodd-Frank Act.

    March 30, 2023 WebPage Regulatory News
    News

    BCBS to Consult on Pillar 3 Climate Risk Disclosures by End of 2023

    The Bank for International Settlements (BIS) published a summary of the recent Basel Committee (BCBS) meetings.

    March 23, 2023 WebPage Regulatory News
    News

    FINMA Approves Merger of Credit Suisse and UBS

    The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.

    March 21, 2023 WebPage Regulatory News
    News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News
    News

    US Congress Report Examines Data Privacy and Cybersecurity Regulations

    The U.S. Congressional Research Service published a report on banking, data privacy, and cybersecurity regulation.

    March 13, 2023 WebPage Regulatory News
    News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News
    News

    EU to Conduct One-Off Scenario Analysis to Assess Transition Risk

    The European authorities recently made multiple announcements that impact the banking sector.

    March 10, 2023 WebPage Regulatory News
    News

    APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.

    March 07, 2023 WebPage Regulatory News
    News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News
    News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8810