The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022. The Communication provides an update to the information on its approach to prior permissions for eligible liabilities; this approach was initially published in July 2021, in line with the draft regulatory technical standards on own funds and eligible liabilities. This Communication is intended to assist institutions when applying to SRB for permission for reducing eligible liabilities instruments. The Communication summarizes and explains the procedures that institutions should follow when seeking the SRB permission to call, redeem, repay, or repurchase eligible liabilities instruments before their contractual maturity.
The obligation to seek approval applies to resolution entities, non-resolution entities, and institutions that will be wound up under normal insolvency proceedings. Resolution entities and non-resolution entities with internal total loss-absorbing capacity (TLAC) requirements have been in the scope of the permission regime since June 27, 2019. Non-resolution entities that are subject to minimum requirement for own funds and eligible liabilities (MREL) are in the scope of the permission regime from January 01, 2022. As of January 01, 2022, the permission regime will apply to all eligible liabilities instruments. This includes senior unsecured liabilities, subordinated liabilities, and internal MREL eligible liabilities. Eligible liability instruments with a residual maturity of less than one year are also in scope.
The European Banking Authority (EBA) had published, in May 2021, the final report on the draft regulatory technical standards on own funds and eligible liabilities and submitted it to the European Commission for endorsement as a Delegated Regulation. These draft regulatory technical standards are mandated by Article 78a(3) of the Capital Requirements Regulation (CRR) and specify the procedures for granting ad hoc permission and general prior permission, including the time limits and information requirements. As of January 01, 2022, SRB will follow these draft regulatory technical standards for granting permission. All applications seeking SRB authorization as of the date of the current Communication should be aligned with the requirements in the draft regulatory technical standards. However, for applications due by August 31, 2021 and seeking authorizations as of January 01, 2022, as an exceptional measure, SRB will accept applications from institutions until September 30, 2021.
Aligning the permission regime with the draft regulatory technical standards now would allow banks to continue with their redemption transactions following the adoption of the Delegated Regulation without any disruption or the need to submit new applications. This, however, would be applicable under the condition that the Delegated Regulation will not substantively deviate from the draft regulatory technical standards. Aligning the permission regime with the draft regulatory technical standards will also provide certainty and transparency on what SRB is expecting from banks that wish to apply for prior permission to redeem their eligible liabilities instruments early. SRB will update this communication if any parts of the draft regulatory standards are changed when the Delegated Regulation is endorsed.
Keywords: Europe, EU, Banking, Eligible Liabilities, Regulatory Technical Standards, Own Funds, CRR, MREL, Basel, Resolution Framework, Permissions Regime, TLAC, SRB
The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.
The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).
The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.
The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."
The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.