ESRB Publishes Member Notifications on O-SII and Systemic Risk Buffers
BNB notified EBA, ECB, and ESRB about its decision on the identification of other systemically important institutions (O-SIIs), the activation of the O-SII buffers, and the level of systemic risk buffers. Additionally, Polish Financial Supervision Authority (Komisja Nadzoru Finansowego or KNF) notified EBA, ECB, and ESRB about its decision on the identification of other systemically important institutions (O-SII) and the activation of O-SII buffers.
BNB announced the list of identified O-SII institutions, their respective overall scores, the respective buffer rates, and the timeline of the phase-in of the buffer rates. The O-SII institutions include DSK Bank EAD, UniCredit Bulbank AD, First Investment Bank AD, United Bulgarian Bank AD, Eurobank Bulgaria AD, Raiffeisenbank (Bulgaria) EAD, Central Cooperative Bank AD, and Bulgarian Development Bank AD. The phase-in period for the O-SII buffer rates is from 2017 to 2020. The list of O-SIIs was identified based on the quantitative approach in accordance with the EBA guidelines. Changes in the buffer level of certain institutions are due to changes in the overall score of these institutions in 2019, from 2018. As an integral part of the combined buffer requirements, the O-SII buffers will further increase capacity of the systemically important institutions to absorb losses. The O-SII buffer rates are proportional to the higher risk that these institutions pose to the financial system due to their size, complexity, and importance for the economy.
Additionally, BNB notified that it introduced the systemic risk buffer at a rate of 3% for risk exposures located in Bulgaria in 2014. In the 2019 review of the systemic risk buffer, BNB confirmed the current level of the buffer. The buffer is applicable to all banks in the country on both individual and consolidated levels. This means that banks identified as O-SIIs shall comply with the sum of the two buffer requirements. SRB requirement will be reviewed every two years. Over the years, it has been assessed that the systemic risk buffer does not represent additional regulatory burden for banks. KNF identified O-SIIs and set the O-SII buffer for these institutions in October 2016, with the activation of the measures from December 31, 2016. The measure has now been reviewed and will continue to apply until next years’ annual review.
Related Links
- Notification of BNB on O-SIIs (PDF)
- Notification of BNB on Systemic Risk Buffers (PDF)
- Notification of KNF on O-SIIs (PDF)
Keywords: Europe, EU, Bulgaria, Poland, Banking, Systemic Risk Buffer, Macro-Prudential Measures, Systemic Risk, Proportionality, BNB, EC, EBA, ECB, ESRB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
Bundesbank Releases XBRL Taxonomy 2.9.1 for ReportingRelated Articles
BoE Clarifies Approach to Treatment of Payment Holidays on Form PL
BoE published a statistical notice (Notice 2020/9) explaining the approach for treatment of payment holidays on the profit and loss return or Form PL.
BoE Provides Reporting Update on Form AS and Form FV
BoE updated the known issues document for the statistical reporting Forms AS and FV.
FED Announces Capital Requirements for Large Banks
FED announced individual capital requirements for 34 large banks and these requirements go into effect on October 01, 2020.
SRB Publishes Guidance on Implementation of Bail-In Tool
SRB published a set of documents to give operational guidance to banks on implementation of the bail-in tool.
BIS Publishes Update on G20 TechSprint Initiative
BIS published an update on the G20 TechSprint Initiative, which was launched in April 2020 and aims to highlight the potential for technologies to resolve regulatory compliance (regtech) and supervisory (suptech) challenges.
OSFI Provides Update on Implementation of IFRS 17 in Canada
OSFI published a letter that provides an update on the milestones for the implementation of the IFRS 17 standard on insurance contracts.
EBA Provides Clarity on Implementation of Guidance on COVID Reporting
EBA updated the report on the implementation of selected COVID-19 policies.
FSI Note Discusses Challenges Associated with COVID Relief Measures
The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.
BCBS Consults on Principles for Operational Risk and Resilience
BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.
BoE Updates Template and Definitions for Form ER
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
