Featured Product

    SRB Publishes Approach to Prior Permissions for Eligible Liabilities

    July 28, 2021

    The Single Resolution Board (SRB) published the minimum requirement for own funds and eligible liabilities (MREL) dashboard for the first quarter of 2021 (average MREL shortfall reached EUR 42.2 billion) and an article that explains the goal of the heatmap for assessing resolvability. Also published was the information on the SRB approach to prior permissions for eligible liabilities, in line with the upcoming regulatory changes. To contribute to a smooth transition to the framework in the upcoming Delegated Regulation on own funds and eligible liabilities and to limit the need for banks to re-submit a second authorization application for General Prior Permissions within the same calendar year (that is once the Delegated Regulation enters into force), SRB will amend its provisional policy in line with Section 2—Subsection 2—“Permission for reducing eligible liabilities instruments” of the draft EBA regulatory technical standards on own funds and eligible liabilities, for all permissions effective as of January 01, 2022.

    This means that applications for permission for redemptions of eligible liabilities should be compliant with the requirements in the regulatory technical standards. Exceptionally, banks can file their applications until the end of September 2021, to allow them to familiarize themselves with the details. The draft technical standards includes some material changes on the conditions for authorization compared to SRB provisional policy, in particular regarding the authorized envelope for redemptions (pre-determined amount) and the need to deduct it upfront from the MREL resources of banks. Banks’ applications for authorizations from January 01, 2022 should be based on the list of information requirements as referred to in Articles 32(d) and (e) of the draft technical standards. An additional communication on the new regime will be published in early September. 

    Additionally, the article on assessing resolvability explains the goals of the heatmap on assessing resolvability, how it works, and how it will help foster convergence with other authorities’ resolvability monitoring. SRB has established harmonized horizontal criteria to classify banks’ progress, according to each resolvability condition and the impact the condition has on the feasibility of the resolution strategy; it also established criteria to determine materiality of the impediments and consider appropriate corrective action. Depending on how significant the impediments are, SRB will ask banks to address them either through dedicated corrective actions, under close monitoring by SRB’s internal resolution teams during the following twelve-month period, or by starting the formal procedure for addressing substantive impediments to resolvability. The need to trigger the substantive impediments procedure will result from a holistic assessment. The heatmap will also allow benchmarking across banks, peer groups, and resolution strategies to foster a level playing field in the Banking Union. An anonymized version of the heat-map according to various dimensions will be made public closer to the end of the phasing-in period of the Expectations for Banks. The heatmap approach not only promotes convergence and comparability in monitoring resolvability across Banking Union banks, but should also allow to draw holistic comparisons with the resolution frameworks outside the Banking Union. 

     

    Related Links

    Keywords: Europe, EU, Banking, Eligible Liabilities, Regulatory Technical Standards, Own Funds, CRR, MREL, Basel, Resolvability Assessment, Heatmap, Resolution Framework, Permission Regime, MREL Dashboard, SRB

    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521