Featured Product

    European Council Adopts Changes to CRR2 to Ease Impact of COVID Crisis

    June 24, 2020

    European Council published the final text of the regulation that implements targeted adjustments to the Capital Requirements Regulations (CRR and CRR2) to help credit institutions in managing the economic stress arising from the COVID-19 pandemic. European Council has published this final text of revised regulation prior to its publication in the Official Journal of the European Union. Earlier, on June 19, 2020, European Parliament had adopted this package of measures, which will become applicable on the day following that of their publication in the Official Journal of the European Union.

    This banking package provides targeted and exceptional legislative changes to Capital Requirements Regulations to maximize the capacity of banks to lend money and support households and businesses to recover from the COVID-19 crisis. The targeted amendments in this regulation concern:

    • changes to the minimum amount of capital that banks are required to hold for non-performing loans (NPLs) under the "prudential backstop". The preferential treatment of NPLs guaranteed by export credit agencies will be extended to other public-sector guarantors in the context of measures aimed at mitigating the economic impact of the COVID-19 pandemic.
    • the extension by two years of transitional arrangements related to the implementation of the international accounting standard IFRS 9. This will allow banks to mitigate the potential negative impact of a likely increase in banks' provisions for expected credit losses.
    • the temporary reintroduction of a prudential filter for sovereign bond exposures, which will mitigate the impact of the current volatility of financial markets on public debt.
    • additional flexibility for supervisors to mitigate negative effects of the extreme market volatility observed during the COVID-19 pandemic, in particular by excluding "overshootings" that occurred in 2020 and 2021 in banks' internal models for market risks.
    • targeted changes to the calculation of the leverage ratio (that is, the ratio between banks' capital and its exposures) and a delay in the introduction of the leverage ratio buffer by one year to January 2023.
    • transitional arrangements for exposures to national governments and central banks denominated in a currency of another member state, to support funding options in non-euro member states mitigating the consequences of the COVID-19 pandemic.
    • the earlier introduction of some capital relief measure for banks under CRR 2, most notably with respect to preferential treatment of certain loans backed by pensions or salaries and their SMEs and infrastructure loans, thus encouraging the credit flow to pensioners, employees, businesses and infrastructure investments.

     

    Related Links

    Keywords: Europe, Banking, Basel, CRR2, IFRS 9, NPLs, Sovereign Bonds, Leverage Ratio, COVID-19, European Parliament, European Council

    Featured Experts
    Related Articles
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    BCBS published the eighteenth progress report on implementation of the Basel III regulatory framework in member jurisdictions.

    July 06, 2020 WebPage Regulatory News
    News

    BCBS Amends Guidelines on Sound Management of AML/CFT Risks

    BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).

    July 02, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Amendments to Swap Margin Rule

    US Agencies (Farm Credit Administration, FDIC, FED, FHFA, and OCC) finalized changes to the swap margin rule to facilitate implementation of prudent risk management strategies at banks and other entities with significant swap activities.

    July 01, 2020 WebPage Regulatory News
    News

    PRA Letter Sets Expectations on Approach to Managing Climate Risks

    PRA published a letter that builds on the expectations set out in the supervisory statement (SS3/19) on enhancing banks' and insurers' approaches to managing the financial risks from climate change.

    July 01, 2020 WebPage Regulatory News
    News

    EBA Guidelines on Treatment of Structural Foreign Exchange Under CRR

    EBA finalized the guidelines on treatment of structural foreign-exchange (FX) positions under Article 352(2) of the Capital Requirements Regulation (CRR).

    July 01, 2020 WebPage Regulatory News
    News

    FSB Issues Statement on Impact of COVID-19 Crisis on Benchmark Reform

    FSB published a statement on the impact of COVID-19 pandemic on global benchmark transition.

    July 01, 2020 WebPage Regulatory News
    News

    IAIS Publishes List of Internationally Active Insurance Groups

    IAIS published the list of Internationally Active Insurance Groups (IAIGs) publicly disclosed by group-wide supervisors.

    July 01, 2020 WebPage Regulatory News
    News

    FED Temporarily Revises FR Y-9C With Respect to PPPLF and CARES Act

    FED has temporarily revised the reporting form on consolidated financial statements for holding companies (FR Y-9C; OMB No. 7100-0128).

    July 01, 2020 WebPage Regulatory News
    News

    EC Launches Consultation on Review of Solvency II Directive

    EC launched a consultation on the review of the key elements of Solvency II Directive, with the comment period ending on October 21, 2020.

    July 01, 2020 WebPage Regulatory News
    News

    ECB Consults on Supervisory Approach to Consolidation in Banking

    ECB launched a consultation on the guide that sets out supervisory approach to consolidation projects in the banking sector.

    July 01, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5431