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
FINMA Approves Merger of Credit Suisse and UBS
The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
MFSA Sets Out Supervisory Priorities, Issues Reporting Updates
The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023
German Regulators Issue Multiple Reporting Updates for Banks
Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.