EU to Amend Credit Risk Adjustment Rules; ESAs Submit Queries on SFDR
The European Council published a draft Commission Delegated Regulation to amend the regulatory technical standards on specification of the calculation of specific and general credit risk adjustments. Additionally, the European Supervisory Authorities (ESAs) have submitted, to the European Commission (EC), queries related to the interpretation of the European Union laws on the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation.
Draft regulation on amendments to standards on credit risk adjustments. The draft regulation amends Regulation No 183/2014 with respect to calculating the specific credit risk adjustments for the purposes of assigning the risk-weights referred to in Article 127(1) of the Capital Requirements Regulation or CRR (575/2013) to the unsecured part of a defaulted exposure. When calculating specific credit risk adjustments for such purposes, institutions shall include any positive difference between the amount owed by the obligor on that exposure and the sum of the additional own funds reduction if that exposure was written-off fully and any already existing own funds reductions related to that exposure. The Commission Delegated Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
Queries on SFDR and Taxonomy Regulation. ESAs have submitted queries on the interpretation of SFDR and Taxonomy Regulation. The queries address topics that relate to principal adverse impact disclosures, financial advisers, transparency of the integration of sustainability risks and rules for products no longer made available, good governance practices, and scope of certain articles under the Taxonomy Regulation.
Related Links
Keywords: Europe, EU, Banking, Insurance, Securities, Credit Risk, CRR, Basel, SFDR, Taxonomy Regulation, Sustainable Finance, ESG, Regulatory Technical Standards, Regulatory Capital, Risk-Weighted Assets, Defaulted Exposures, ESAs, EC, European Council
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
EC Rule Provides Technical Information for Solvency II CalculationsRelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards