SRB announced that Bulgaria and Croatia will join the Single Resolution Mechanism, following the ECB decisions to establish close cooperation with the central banks of Bulgaria and Croatia (BNB and HNB, respectively). The ECB decisions 2020/1015 on cooperation with BNB and 2020/1016 on cooperation with HNB have been published in the Official Journal of the European Union. The Governing Council of ECB adopted the decisions following the fulfillment of the necessary supervisory and legislative prerequisites. The Decisions indicate the modalities for the transfer of the supervisory tasks to ECB. The starting date of close cooperation of ECB with BNB and HNB shall be October 01, 2020. The Decisions shall enter into force on the fourteenth day following that of their publication in the Official Journal of the European Union.
Starting from October 01, 2020, ECB will be in charge of the direct supervision of the significant institutions in the Republic of Bulgaria and the Republic of Croatia, the common procedures for all supervised entities, and the oversight of less significant institutions. SRB will become the resolution authority for the significant institutions and all cross-border groups. SRB will also oversee resolution planning for less significant institutions. Banks and certain investment firms in the two countries will also contribute to the Single Resolution Fund, which supports bank resolution. As national resolution authorities of the two Banking Union member states, BNB and HNB will have representatives in Plenary Session and Extended Executive Sessions of SRB with the same rights and obligations as all other members, including voting rights. ECB Banking Supervision, BNB, and HNB are making preparations to ensure a smooth transition to the new supervisory regime. SRB and the national resolution authorities in Bulgaria and Croatia are well-prepared for a smooth transition to the new resolution regime.
In addition, ECB announced inclusion of the Croatian kuna and Bulgarian lev in the Exchange Rate Mechanism (ERM) II. The compulsory intervention rates for these currencies have also been established with effect from July 13, 2020. ECB published application letters from Bulgarian and Croatian Authorities and these letters include the post-entry commitments to be taken at the time of ERM II entry. ECB also published an assessment report on completion of the commitments made by the Republic of Bulgaria and the Republic of Croatia on the macro-prudential toolkit. The assessment report highlights that macro-prudential instruments that impose certain minimum standards on the issuance of new residential mortgage loans can play an important role in counteracting the build-up of systemic risks and strengthening the resilience of the financial system. A strong legal basis can support the effectiveness and active use of borrower-based measures. At the time of expressing the intent to join ERM II, borrower-based measures were not explicitly listed in the macro-prudential framework in Bulgaria and Croatia. In their letter of intent to join ERM II, the Bulgarian and Croatian authorities committed to broaden the macro-prudential toolkit by providing the legal basis for borrower-based measures. ECB concluded in the report that the prior commitment to broadening the macro-prudential toolkit by providing legislative basis for borrower-based measures has been fulfilled.
- SRB Press Release
- Press Release on Cooperation with HNB
- Press Release on Cooperation with BNB
- Press Release on Compulsory Intervention Rates
- Decision 2020/1015
- Decision 2020/1016
- Application Letter from Croatian Authorities (PDF)
- Application Letter from Bulgarian Authorities (PDF)
- Assessment Report on Commitments by Croatia (PDF)
- Assessment Report on Commitments by Bulgaria (PDF)
Effective Date: July 27, 2020
Keywords: Europe, EU, Croatia, Bulgaria, Banking, Close Cooperation, Resolution Planning, Significant Institutions, Less Significant Institutions, ERM II, Systemic Risk, Macro-Prudential Framework, BNB, HNB, ECB
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
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.
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.
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.