Featured Product

    SRB Chair on Resolution Framework Priorities for Next EU Legislature

    May 06, 2019

    The SRB Chair Elke König published an article that outlines the potential resolution framework priorities for the next EU legislature, just as the mandate of the current European Commission and Parliament draws to an end. This article was published in The Eurofi Magazine.

    In the article, she mentions that, from the perspective of SRB, the finalization of the Banking Package represents a milestone in strengthening the resolution framework. The partial harmonization of the creditor hierarchy was another step forward. Building on these achievements, SRB is hopeful that the next legislature will deliver on the implementation, review, and completion of the resolution framework. She then outlined the issues that legislators in the next mandate could address to the complete framework:

    • Addressing asymmetries between the EU resolution regime and national insolvency frameworks
    • Aligning the conditions to determine that a bank is "failing or likely to fail" with the criteria for liquidation at national level
    • Addressing the issue of the requirements for burden sharing under the 2013 Banking Communication of EC, which apply in cases of precautionary recapitalization and liquidation aid, not being entirely in line with those for bail-in under the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism Regulation (SRMR), potentially giving wrong incentives when compared to resolution
    • Fully harmonizing the ranking of creditors in insolvency, as Directive 2017/2399 focused only on unsecured debt instruments in the hierarchy, while national differences remain on the ranking of the rest of the creditors

    She highlighted that deepening the Economic and Monetary Union in EU requires the completion of the Banking Union and of the Capital Markets Union. A common framework for banks’ insolvency would constitute a significant advance on both paths. Both strong Banking Union and European capital market can play an important role in the creation of the needed liquidity for capital instruments and Minimum Requirement for own funds and Eligible Liabilities (MREL). Therefore, work on these must continue to progress in the new EU legislature.

     

    Related Link: Article by SRB Chair

     

    Keywords: Europe, EU, Banking, BRRD, SRMR, Directive 2017/2399, MREL, Resolution Framework, Creditor Hierarchy, Banking Union, SRB

    Related Articles
    News

    APRA Sets LAC for D-SIBs, Proposes to Enhance Crisis Preparedness

    APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).

    December 02, 2021 WebPage Regulatory News
    News

    EC to Review Macro-Prudential Rules while ESRB Assesses Policy Stance

    The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).

    December 01, 2021 WebPage Regulatory News
    News

    FSB Sets Out Good Practices for Crisis Management Groups

    The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.

    November 30, 2021 WebPage Regulatory News
    News

    APRA Penalizes Heritage Bank for Incorrect Reporting of Capital

    The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Releases Annual Report 2021-2022

    The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Updates Timeline for Implementation of Certain Basel Rules

    Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.

    November 29, 2021 WebPage Regulatory News
    News

    EC Defers Adoption of Regulatory Standards for Disclosures Under SFDR

    EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.

    November 29, 2021 WebPage Regulatory News
    News

    FCA Releases MIFIDPRU Application Forms and Third Set of Rules on IFPR

    The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.

    November 29, 2021 WebPage Regulatory News
    News

    APRA Finalizes Capital Adequacy Standards for Banks

    The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.

    November 29, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.

    November 29, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7751