Featured Product

    Peter Praet of ECB on Enabling Pan European Banks in Banking Union

    September 05, 2018

    While speaking at the Eurofi Financial Forum 2018 in Vienna, Peter Praet of ECB talked about creating an enabling environment for pan-European banks in the Banking Union. He highlights that, in recent years, the European Union has achieved major progress toward financial integration. EU now has a single supervisor and a single resolution authority, with banks being subject to the same European rulebook.

    The Banking Union also contributes to providing effective mechanisms for cross-border risk-sharing and broadening the sources of funding within a country, thereby promoting macroeconomic stability and growth. However, the following obstacles that hinder the fungibility of capital and liquidity of banking groups can still be observed:

    • Number of national options and discretions are hindering the practical application of cross-border liquidity waivers within the Union.
    • The proposal to have cross-border capital waivers within the EU was not taken forward in the ongoing review of the CRR, which is a missed opportunity. Some national authorities are concerned about the possible financial stability implications of the proposal. However, such concerns could be addressed by making the waivers subject to additional prudential safeguards and by putting in place appropriate transition arrangements that account for the planned further progress on the Banking Union.
    • The major progress made in Banking Union needs to be recognized in the international regulatory framework. The international regulatory framework should recognize the progress that has been made in the Banking Union and exclude intra Banking Union positions from the cross-jurisdictional indicators in the global systemically important bank (G-SIB) methodology.
    • The allocation of internal minimum requirement for own funds and eligible liabilities (MREL) has turned out to be an area of tension between national jurisdictions. Jurisdictions with a foreign bank subsidiary prefer to have a high pre-positioning of internal MREL to ensure an orderly resolution of its local subsidiary. However, this implies a certain degree of ring-fencing to the detriment of the foreign parent bank. The compromise reached by member states in the Council only allows that internal MREL is waived if the resolution entity and the subsidiary are located in the same member state. To account for the progress in terms of joint supervision and resolution among euro area countries, internal MREL waivers on a cross-border basis in the Banking Union should be allowed, as this would contribute to continuous cross-border banking. Therefore, it should also be possible to use guarantees to replace internal MREL and allow for more flexibility in the allocation of resources within the Banking Union.

     

    Related Link: Speech

    Keywords: Europe, EU, Banking, Banking Union, Pan-European Banking, Orderly Resolution, ECB

    Related Articles
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance for New Prudential Standard on Remuneration

    The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.

    October 18, 2021 WebPage Regulatory News
    News

    OCC Updated LIBOR Self-Assessment Tool for Banks

    The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).

    October 18, 2021 WebPage Regulatory News
    News

    TCFD Updates Guidance for Financial Disclosures on Climate Risk

    The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

    October 14, 2021 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.

    October 14, 2021 WebPage Regulatory News
    News

    ACPR Implements Updates Related to DPM Version 3.1

    The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.

    October 14, 2021 WebPage Regulatory News
    News

    EBA Note Examines Transition Risks of Benchmark Rates

    The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.

    October 14, 2021 WebPage Regulatory News
    News

    OSFI to Communicate Next Steps on Climate Risk Policy in Early 2022

    In a letter to the federally regulated financial institutions and pension plans, the Office of the Superintendent of Financial Institutions (OSFI) published a summary of the feedback received to the January 2021 discussion paper on ways to address climate risks.

    October 12, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7568