European Banking Authority (EBA)’s Post

Last Friday we launched the industry consultation on the 2025 stress test package. Looking forward to receiving your feedback!! The package integrates the upcoming Capital Requirements Regulation (CRR3), set to be implemented on January 1, 2025. It also considers the Commission’s announcement to postpone the application date of the fundamental review of the trading book (FRTB). Other methodological enanchments include the centralisation of net interest income (NII) projections and advancements in the market risk methodology to increase risk sensitivity. The exercise will cover 68 EU banks. #EUwideStressTest

Die Bankenwelt und ihre Risiken. Neue Untersuchung der EBA. Lesenswert! The European Banking Authority (EBA) today published the spring edition of its risk assessment report (RAR). The report covers the EBA’s common risk assessment as well as the analysis of banks’ asset encumbrance and funding plan data, which had previously been published in two separate reports. It also includes specific chapters dedicated to EU/EEA banks’ Commercial Real Estate (CRE) exposures and EU/EEA banks’ interconnections with non-bank financial intermediaries (NBFIs).  https://lnkd.in/e-sXjdQb

📢 The European Banking Authority (EBA) published yesterday the package of technical #standards and guidelines under #MiCAR on the topics of reporting, liquidity stress testing and supervisory colleges. 🔗 https://lnkd.in/euJbWyEY

📚 PUBLICATION: EBI Working Paper Series No. 150 “The Theory of Bank Resolution: Does the Bail-in Work?” by Urs Lendermann (Deutsche Bundesbank University of Applied Sciences) was published on 23 August 2023 in the EBI Working Paper Series No. 150. The Credit Suisse default triggered considerable discourse surrounding the absence of any bank resolution procedure. Instead, public guarantees and unconventional emergency liquidity assistance were granted. This situation prompts the author to explore the bail-in tool and the total loss-absorbing capacity (TLAC), which were introduced by the G20 Financial Stability Board to eliminate the need for public bailouts of global systemically important banks in case of failure. Acknowledging the pragmatic standpoint, it is essential to recognize that banks hold divergent perspectives concerning their resolution planning while policymakers continue to grapple with the persistent ‘too big to fail’ dilemma without a clearly discernible pathway for resolution. In light of these premises, the author proposes to consider contractual approaches to enhance the TLAC framework, incorporating a market-based trigger design as a signal for eroding market confidence. These improvements aim to create conditions that enable central banks to provide emergency liquidity assistance, thereby averting systemic disruptions during a financial crisis. 📎 Read the entire paper here: https://lnkd.in/dipBrTSi #workingpaper #banking #bankresolution #finance #eu #law

My Take on the EU's FRTB Implementation Delay The European Union's decision to postpone the Fundamental Review of the Trading Book (FRTB) deadline to January 2026 is a strategic move that addresses two critical concerns. Firstly, it ensures competitive parity for European banks against their U.S. counterparts, aligning with expected U.S. delays in Basel III reforms. Secondly, it acknowledges industry concerns, particularly from large Eurozone banks, about the immediate impacts of stricter capital requirements on their competitiveness. In my opinion, this delay is a welcome relief for European banks, allowing them to better prepare for the new regulations and maintain a level playing field. However, it's crucial for banks to continue working towards FRTB objectives, and I believe that solutions like Murex can help them achieve compliance and maintain competitiveness. What are your thoughts on the FRTB implementation delay? Share your insights in the comments! #Banking #Finance #EU #FRTB #Regulations #BaselIII #FinancialServices #IndustryNews #MarketRisk

Published on March 26, 2024 by the National Bank of Belgium, this circular sets out the main guidelines and content requirements on recovery plans applicable to Belgian credit institutions and Belgian parent undertakings of credit institutions that are not directly supervised by the ECB pursuant to the SSM Regulation. It is meant as a user-friendly tool to guide institutions in drafting their recovery plans in accordance with the requirements of the Bank Recovery and Resolution Directive (BRRD). #riskmanagement #recoveryplanning #recoveryplan #bankrecovery #BRRD #riskassessment #operationalresilience

Yesterday, the DLA participated in the 'Technical Workshop on Macroprudential Policies for Non-Bank Financial Intermediaries' (NBFI) together with around 100 other stakeholders in Brussels. More than 700 participants attended online. The reason was the consultation assessing the adequacy of macroprudential policies for NBFIs: https://lnkd.in/ekiTvNwP There are some exciting insights to report: - Business models and risk profiles of banks and NBFIs differ. Therefore, the principle 'same activity - same risk - same regulation' cannot apply without further consideration. - All known crises were caused by banks. So far no scandals have emanated from the NBFI sector. The excess of leverage, however, can potentially cause crises and needs to be supervised closely. - Too little is known about what happens at the NBFIs. There is actually enough data, but the problem is that it is not so easily shared. A way should be found that allows all stakeholders to provide their data - or at least the most important data - in order to gain a better overview of the market. - Large parts of the market are already neatly regulated and centrally supervised (AIFMD, MiFID, ECSPR, etc.). Others not yet at all. The question is whether it is not better to dry up the Grey Capital Market first before regulating the White Capital Market even more strictly? - Due to the variety of regulations from AIFMD, MiFID, ECSPR & Co, there are often similar rules for the same problem. This may also be more efficient by some kind of horizontal approach. - The great diversity among NBFIs is crying out for uniform European supervision.

**Updated Report on Monitoring of AT1, AT2, TLAC, MREL by the EBA** 📢 The European Banking Authority (EBA) has published, on Thursday, June 27, an updated report on the monitoring of Additional Tier 1 (AT1), Tier 2 (AT2), Total Loss-Absorbing Capacity (TLAC), and the Minimum Requirement for own funds and Eligible Liabilities (MREL) of European Union (EU) institutions. 🔍 **Key Points:** - **Additional Tier 1 and Tier 2 Instruments (AT1 and AT2)**: The report provides new guidance on the prudential assessment of non-CET1 (Common Equity Tier 1) instruments, detailing the issuance conditions and required characteristics for these financial instruments. - **Total Loss-Absorbing Capacity (TLAC)**: The update includes information on how financial institutions should structure their liabilities to meet TLAC requirements, aiming to improve financial resilience and reduce systemic risks. - **Minimum Requirement for own funds and Eligible Liabilities (MREL)**: The report specifies the compliance criteria for eligible liabilities under MREL, ensuring that financial institutions have sufficient own funds to absorb losses and recapitalize if needed. 📄 For more details, see the full press release here: [The EBA updates monitoring of Additional Tier 1, Tier 2 and TLAC/MREL eligible liabilities instruments of European Union institutions | European Banking Authority](https://lnkd.in/edjk5fEZ

📢 Final Draft Technical Standards on Market Risk published: The European Banking Authority (EBA) has published final amendments to its Regulatory Technical Standards (RTS) on the fundamental review of the trading book (FRTB). The revisions mostly aim to align these RTS with the Capital Requirements Regulation (CRR3) and ensure stability in the applicable regulatory framework. The RTS are part of the roadmap on the Banking Package. Read the report here: 👉 https://lnkd.in/epcw87VJ #EBA #FRTB #CRR3

📣 The EBA has just published final amendments to its Regulatory Technical Standards (RTS) on the fundamental review of the trading book (FRTB) as part of its roadmap for the implementation of the Banking Package in the EU ℹ The revisions mostly aim to align these RTS with the Capital Requirements Regulation (CRR3) and ensure stability in the applicable regulatory framework. ➡ The CRR3 introduced a number of changes to the FRTB and included mandates for the EBA to amend existing RTS for them to fit with the new Level 1 text. Want to know more? Follow this link 👇 https://europa.eu/!nKwjMD