BoE decided to recognize the bail-in of PrivatBank, with HM Treasury providing its approval of this decision. This is in response to a request from the National Bank of Ukraine to recognize the bail-in of four loans made by “UK SPV Credit Finance plc” to PrivatBank. The BoE decision does not affect deposits held in UK banks and the recognition gives effect to the bail-in of the four loans in question as a matter of English law.
As set out in the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions, third-country recognition is central to effective cross-border resolutions because it enables resolution actions taken in one jurisdiction to have effect in other jurisdictions. Under the UK law, BoE is required, where a request for recognition has been made, to make a decision on whether or not to recognize such a resolution action. PrivatBank is a bank incorporated in Ukraine. It does not perform banking activities or have banking customers in the UK. The request for recognition arises solely because of the existence of the four English law loans to PrivatBank. In 2016, PrivatBank was subject to bail-in by the National Bank of Ukraine. Following this, the National Bank of Ukraine submitted a request for recognition to BoE in relation to the bail-in of the four loans, totaling $595 million, which were funded by notes issued by UK SPV and are governed by the English law. Under section 89H of the Banking Act 2009, to decide whether to recognize this bail-in, BoE is required to undertake an analysis to determine whether the third-country bail-in is broadly comparable in its objectives and anticipated results to those of the UK resolution regime. BoE must then also consider whether any of the statutory grounds apply for refusing to recognize the bail-in. While considering its decision, BoE has kept relevant stakeholders, including the National Bank of Ukraine and representatives of creditors, informed about the recognition process throughout.
Related Link: Press Release
Keywords: Europe, UK, Ukraine, Banking, PrivatBank, National Bank of Ukraine, Bain In, Credit Risk, Resolution Framework, Third-Country Recognition, BoE
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).
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.
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.
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.
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
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.
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.
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.
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
The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.