GIM Legal’s Post

Are you ready to master the complexities of the Internal Rating-Based (IRB) approach? 📈 In the dynamic world of financial regulation, the IRB approach is key to making the Risk-Weighted Assets (RWA) framework more risk-sensitive and aligned with internal practices. However, due to heterogeneous approval practices across countries, these approaches have diverged significantly. Recently, regulatory bodies like the European Banking Authority (EBA) and the European Central Bank (ECB) have intensified efforts to realign and homogenise IRB practices. This alignment aims to standardise the analytical and processual building blocks of an IRB framework, its mechanics, and the new requirements introduced for re-alignment. At our upcoming seminar, we will delve into these critical elements, providing you with a comprehensive overview of the current state of IRB and its integration into internal regulatory management. Did you know that according to the EBA, more than 50% of banks have faced challenges in aligning their IRB practices with new regulatory standards? (EBA, 2022) How have your organisations adapted to these evolving IRB requirements? What challenges have you faced in aligning with new regulatory standards? Join our seminar to learn more. To register, visit:  https://lnkd.in/gBcGADqN #FinancialRegulation #RiskManagement #IRBApproach #BankingStandards #RegulatoryCompliance #aspectadvisory #aspectadvisoryacademy

The Basel Committee on Banking Supervision is calling for comments on a consultative document that aims to mitigate “window dressing” behaviour by some banks in the context of the global systemically important bank (G-SIB) framework. Such regulatory arbitrage behaviour seeks to temporarily reduce banks’ perceived systemic footprint around the reference dates used for the reporting and public disclosure of G-SIB scores. Window dressing behaviour is unacceptable as it undermines the intended policy objectives of the Committee’s standards and risks disrupting the operations of financial markets. The proposed revisions aim at constraining banks’ ability to lower their G-SIB scores by requiring those participating in the G-SIB assessment exercise to report and disclose most G-SIB indicators based on an average of values over the reporting year, rather than year-end values. The Committee welcomes comments on all aspects of the consultation by 7 June 2024. To read the recommendations and comment, look here https://lnkd.in/eKaj7KZs #GSIB #BaselIII

Here we go EBA's Pillar 3 and Embedding ESG risk into decision making tools roadmap.

#EBA published its #roadmap on #sustainable #finance . The Banking Package also includes some innovations to the European prudential framework of #creditinstitutions and it will support the #green #transition as it includes new rules requiring #banks to systematically identify, disclose and manage #risks arising from #environmental, #social and #governance factors (#ESG) as part of their #riskmanagement .

Yesterday, we have published the #EBA #Roadmap on the #EU #BankingPackage, which aims to implement the International Basel III Standards in the European Union. Regarding the Credit Risk section, the initial phase, which we have been working on for months already, encompasses a series of regulatory products primarily related to the standardised approach (#SA), which under the Basel III reforms has undergone extensive revisions, making it more risk-sensitive. #CreditRisk #Basel3 #CRR3 #EBARoadmap #StandardisedApproach

#MiCA European Banking Authority (EBA) has released a package of technical standards and guidelines under #MiCAR addressing prudential matters such as 🔷own funds 🔷liquidity requirements, and 🔷recovery plans. This initiative aims to support a regulated market for asset-referenced (#ARTs) and e-money tokens (#EMTs) in the EU. The package includes: 1️⃣Final draft regulatory technical standards (RTS) on own funds requirements and stress testing for issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs). 2️⃣Final draft RTS detailing the procedure for adjusting own funds to 3% of the average reserve of assets for significant issuers. 3️⃣Final draft RTS on liquidity requirements, including minimum reserve percentages and liquidity management techniques. 4️⃣Final draft RTS defining highly liquid financial instruments, including concentration limits. 5️⃣Final draft RTS on liquidity management policy and procedures, including risk management and stress testing. 6️⃣Guidelines on recovery plans, specifying the required format, content, and communication strategies. These standards and guidelines are designed to ensure robust regulation and promote market stability for ARTs and EMTs in the EU. https://lnkd.in/dwUgNi4v

Published by the European Systemic Risk Board (#ESRB), this important paper provides detailed information on the European significant risk transfer (SRT) securitisation market. The SRT securitisation market is increasingly being used by major EU #banks to manage risk and capital, but is not well known. SRT can provide an extra source of capital, flexibly and at a reasonable cost. Despite the bespoke nature of transactions, the SRT market has expanded significantly in the recent past to the point where it has now become a dependable way for banks to release capital, manage their balance sheets and improve their capital #ratios. Banking supervisors assess SRT transactions to evaluate the degree of risk transfer from banks to investors, allowing institutions to achieve capital relief when this is considered sufficient. The market has become a permanent feature in European banks’ capital management toolkit, alongside other standard but better-known instruments. Drawing on the #ECB’s unique and comprehensive database of SRT securitisations issued by large European banks supervised by the Single Supervisory Mechanism (#SSM), we provide an overview of the main features of the European SRT market, a typology of the structures currently in use and an account of the market’s evolution over the past five years. In so doing, we attempt to shed light on the main conceptual features of SRT securitisations in relation to non-SRT securitisation structures, as well as the regulatory processes behind capital relief that have been instrumental in supporting their increased use by European banks. #Securitisations #significantrisktransfer #capitalrequirements #guarantees #assetquality #lendingconditions #governmentpolicy #regulation #GRC #riskmitigation #lossabsorption #CRT #SRT #EU #creditrisktransfer #capitalrelief

European Banking Authority (EBA)'s implementation roadmap covering #creditrisk #marketrisk #operationalrisk #governance #marketaccess #regulatoryreporting #regulatorydisclosures and #esgreporting. One of the comprehensive framework highlighting the importance of #risktech and #regtech for the financial institutions and the regulators.

The European Banking Authority (EBA) has just published the final draft implementing technical standards (ITS) on public disclosures by institutions that implement the changes in the Pillar 3 disclosure framework and #BaselIII disclosures introduced by the amending Regulation (EU) 2024/1623 (CRR 3). Key highlights include: ➡️ Implementation of CRR 3 disclosure requirements covering output floor, credit risk, market risk, CVA risk, operational risk, and a transitional disclosure on crypto-asset exposures. ➡️ Enhanced alignment with the Basel III framework to promote comparability and consistency in information. ➡️ Comprehensive and uniform disclosure formats to facilitate market discipline and risk profile assessment. It’s worth noting that these new ITS represent the first deliverable in the EBA’s Roadmap on strengthening the prudential framework, with additional updates on #ESG risks and shadow banking disclosures coming later this year. Stay tuned! Further, the #EBA has now disclosed the list of templates that will change and those that will remain unchanged in Step 1 of its implementation plan. For details of the template changes that are part of Step 1 and for insights into what to expect next, read our #WoltersKluwer commentary - Preparing for CRR3 supervisory reporting and Pillar 3 disclosure requirements: https://loom.ly/edFMKkA #BaselIII #CRR3 #Banking #RiskManagement #OneSumX #BaselIV

The European Banking Authority (EBA) has just published the final draft implementing technical standards (ITS) on public disclosures by institutions that implement the changes in the Pillar 3 disclosure framework and #BaselIII disclosures introduced by the amending Regulation (EU) 2024/1623 (CRR 3). Key highlights include: ➡️ Implementation of CRR 3 disclosure requirements covering output floor, credit risk, market risk, CVA risk, operational risk, and a transitional disclosure on crypto-asset exposures. ➡️ Enhanced alignment with the Basel III framework to promote comparability and consistency in information. ➡️ Comprehensive and uniform disclosure formats to facilitate market discipline and risk profile assessment. It’s worth noting that these new ITS represent the first deliverable in the EBA’s Roadmap on strengthening the prudential framework, with additional updates on #ESG risks and shadow banking disclosures coming later this year. Stay tuned! Further, the #EBA has now disclosed the list of templates that will change and those that will remain unchanged in Step 1 of its implementation plan. For details of the template changes that are part of Step 1 and for insights into what to expect next, read our #WoltersKluwer commentary - Preparing for CRR3 supervisory reporting and Pillar 3 disclosure requirements: https://loom.ly/edFMKkA #BaselIII #CRR3 #Banking #RiskManagement #OneSumX #BaselIV