Featured Product

    EBA Consults on Certain Standards and Guidelines Under CRR and BRRD

    June 08, 2022

    The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022. EBA is also seeking comments, until September 08, 2022, on the draft regulatory technical standards on the identification of a group of connected clients (GCC), under the Capital Requirements Regulation (CRR).

    The guidelines for resolution authorities, as expected under the Bank Resolution and Recovery Directive (BRRD/2014/59/EU2), provide a clear framework for resolution authorities to publish their approach to using the bail-in tool; they are intended to ensure that a minimum level of harmonized information is made public on the mechanics underpinning the execution of the bail-in tool. The aim of the guidelines is to increase predictability and enable resolution authorities to set-out their favored approach on exchange mechanic specifying whether they intend to make use of interim instruments or not, an indicative timeline for the application of the exchange mechanic, and how potential valuation adjustments would take place. Resolution authorities that have not yet published their bail-in mechanic are expected to start publishing a high-level document from January 2024 setting out the key aspects of their preferred approach. The authorities should also indicate whether they intend to make use of interim instruments. Resolution authorities that have already published such information are expected to check if their publication complies with the EBA draft Guidelines on improving resolvability for institutions and resolution authorities. Post this consultation, the final report is expected to be published by the end of 2022. International standards on resolution expect home authorities to publish their approach to the exchange mechanic—that is, the operational process allowing the write-down of capital instruments or bail-in-able liabilities or conversion into new shares. 

    The proposed regulatory standards on the identification of the group of connected clients revise and partially replace the EBA guidelines (EBA/GL/2017/15) on connected clients under Article 4 of the CRR Regulation (575/2013). The objective of the definition of a group of connected clients in CRR is to identify two or more natural or legal persons who are so closely linked by idiosyncratic risk factors, that it is prudent to treat them as a single risk. The guidelines are intended to set out clear circumstances where interconnections by means of a control and/or an economic dependency relationship lead to a single risk and thus a grouping requirement. The draft standards also set out rebuttable provisions for the assessment of situations where control and economic dependencies coexist and thus one overall group of connected clients, as opposed to two or more separate groups of connected clients, needs to be formed. Following the submission to the European Commission, the final draft regulatory technical standards will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union

     

    Related Links


    Keywords: Europe, EU, Banking, Resolution Framework, Bank Resolvability, Transferability in Resolution, BRRD, CRR, Basel, Connected Clients, Large Exposures, Regulatory Technical Standards, EBA

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8596