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EBA consults on the coverage of entities in banking group recovery plans
2nd March 2017 - European Banking Authority

Following the Bank Recovery and Resolution Directive (BRRD) implementation, there is now a need to ensure that necessary data and information required for the elaboration of an effective and efficient group recovery plan, is fully shared between all competent authorities concerned and efficiently migrated in the group recovery plan.

Consequently the EBA has launched a consultation paper on its draft Recommendation on the coverage of entities in banking group recovery plans, which is aimed at defining common criteria to identify entities (subsidiaries and branches) that need to be covered in group recovery plans, and the extent of such coverage.

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Refining the PRA’s Pillar 2A capital framework – CP3/17
24th February 2017 - Prudential Regulation Authority

The Prudential Regulation Authority’s (PRA) has published a consultation paper (CP) ‘Refining the PRA’s Pillar 2A capital framework – CP3/17’ which sets out proposed adjustments to its Pillar 2A capital framework.

The purpose of the proposals in this CP is to make the PRA’s Pillar 2A capital assessment both more robust and proportionate by addressing some of the concerns over the differences between SA and IRB risk weights and by strengthening and updating the calibration of the IRB benchmark.

It is relevant to banks, building societies and PRA-designated investment firms.

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Minimum requirement for own funds and eligible liabilities
8th November 2016 - Prudential Regulation Authority

This Policy Statement (PS) provides feedback on responses received to Consultation Paper (CP) 44/15 ‘The minimum requirement for own funds and eligible liabilities (MREL) – buffers and Threshold Conditions’.

The appendix to this PS sets out the final Supervisory Statement (SS) 16/16 on the relationship between MREL and buffers, and MREL and Threshold Conditions.

In the statement of policy on its approach to setting MREL, the Bank, as UK resolution authority, indicates that it expects to direct firms to comply with an end-state MREL from 1st January 2022 and to ensure that firms make progress towards meeting their end-state requirements, the Bank expects to direct relevant firms to also meet an interim MREL.

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Recommendations on the implementation of new counterparty and market risk frameworks
4th November 2016 - European Banking Authority

The European Banking Authority (EBA) has published a Report in response to two calls for advice to assist the European Commission in the adoption into European legislation of two new international frameworks proposed by the Basel Committee on Banking Supervision (BCBS):

1 A new standardised framework for counterparty risk (CCR), i.e. the so-called SA-CCR

2 A new market risk (MKR) framework - the so-called fundamental review of the trading book (FRTB)

In the Report, the EBA focuses on the envisaged impact of these two frameworks, for both large and small firms, and issues recommendations on their implementation.

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Suitability of banks and investment firms management body and key function holders
31st October 2016 - Other

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) has launched a consultation on Guidelines on the Assessment of the Suitability of the Members of Management Body and Key Function Holders (the Guidelines).

The draft Guidelines aim at further improving and harmonising suitability assessments within the EU financial sectors and so ensure sound governance arrangements in financial institutions.

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EBA reviews its guidelines on internal governance
27th October 2016 - European Banking Authority

The draft Guidelines update the existing set of Guidelines on internal governance and, in particular, introduce additional aspects that aim to foster a sound risk culture to be implemented by the management body, to strengthen its oversight over the institutions’ activities and their risk management framework.

Additional guidelines have been provided to further increase the transparency of institutions’ offshore activities and the consideration of risks within institutions’ change processes.

The Guidelines take into account the so-called “three lines of defence” model to identify the functions within institutions responsible to address and manage the risks.

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EBA publishes work programme for 2017
12th October 2016 - European Banking Authority

The European Banking Authority (EBA) has published its detailed annual work programme for 2017, describing the specific activities and tasks of the Authority for the coming year, as well as a multiannual work programme, highlighting the key strategic areas of work in the coming years (from 2017 to 2020).

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Guidelines on ICT Risk Assessment under the Supervisory Review and Evaluation process
7th October 2016 - European Banking Authority

These guidelines are designed to supplement and further specify the EBA Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP). These guidelines apply to all institutions in line with the level of application as set out in the EBA SREP guidelines. However, competent authorities are advised to apply these guidelines proportionately with respect to the categorisation of institutions as defined in the EBA SREP guidelines. The requirements to assess ICT risk as set out in these guidelines consist of the following three parts:

  • Title 1 - general provisions;
  • Title 2 - assessment of institutions’ governance and strategy on ICT; and
  • Title 3 - assessment of institutions’ ICT risk exposures and controls.

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Strengthening accountability in banking and insurance: regulatory references final rules
27th September 2016 - Financial Conduct Authority

  • Section 2 of the Policy Statement (PS) will be of interest to banks and insurers, as well as individual candidates for regulatory roles in the Senior Managers and Certification Regime (SM&CR) and the Senior Insurance Managers Regime (SIMR)

  • The changes set out in Section 3 of the PS will be of interest to all authorised firms

In this Policy Statement (PS), the Financial Conduct Authority (FCA) publishes final rules on regulatory references.

These rules form part of the new accountability regimes introduced in March this year for deposit takers and Prudential Regulation Authority (PRA) investment firms (collectively referred to as ‘banks’ in this document), and Solvency II firms and large non-directive insurers (collectively referred to as ‘insurers’ in the Policy Statement).

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EBA publishes results of the CRDIV-CRR/Basel III monitoring exercise
13th September 2016 - European Banking Authority

The European Banking Authority (EBA) has published its tenth report of the CRDIV-CRR/Basel III monitoring exercise on the European banking system.

The exercise monitors the impact of the transposition of the CRD IV-CRR/Basel III requirements on EU banks.

In particular, it monitors the impact of fully implementing the European Capital Requirements Directive and Regulation (CRD IV / CRR) on banks' capital ratios (risk-based and non-risk-based) and on their LCR, as well as the impact of fully implementing the Basel III framework on banks' net stable funding ratio (NSFR)

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EBA updates its CET1 list
8th September 2016 - European Banking Authority

The European Banking Authority (EBA) has published its third updated list of capital instruments that Competent Supervisory Authorities (CAs) across the European Union (EU) have classified as Common Equity Tier 1 (CET1). In this third update, one new CET1 instrument has been assessed and evaluated as compliant with the CRR, two instruments have been deleted, as their form is no longer in existence, and two new state aid instruments issued under Article 31 of the CRR have been included.

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Core funding ratio cannot replace NSFR when assessing funding risk
8th September 2016 - European Banking Authority

This Report is in response to a request from the European Commission to explore the possibilities of the core stable funding ratio (CFR) as a potential alternative metrics for the assessment of EU banks' funding risk, taking into account proportionality.

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Guidelines on regulatory disclosure requirements - EU Banking Institutions
29th June 2016 - European Banking Authority

The Basel Committee released a revised version of the Pillar 3 framework in January 2015 and now the European Banking Authority (EBA) is issuing own initiative Guidelines to ensure the harmonised and timely implementation of the revised Pillar 3 framework in the EU.

These Guidelines do not fundamentally change the regulatory disclosures, with regard to the requirements defined in Part Eight of Regulation (EU) 575/2013. However, they provide guidance on these disclosures from a presentational aspect by introducing more specific guidance and also specific formats for disclosures,with the use of tables and templates, the revised Pillar 3 framework (‘the RPF’) represents a significant step to enhance the consistency and comparability of institutions’ regulatory disclosures in accordance with Part Eight of Regulation (EU) 575/2013 (‘the CRR’).

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The contractual recognition of bail-in: amendments to Prudential Regulation Authority rules
29th June 2016 - Prudential Regulatory Authority

Article 55 of the Bank Recovery and Resolution Directive (BRRD) requires firms to include in certain non-EU law contracts governing liabilities a term by which the relevant creditor or party to the contract recognises that the liability may be bailed in by the Bank of England as resolution authority.

This policy statement provides feedback on responses received to Consultation Paper 8/16 ‘The contractual recognition of bail-in: amendments to Prudential Regulation Authority rules’.

Overall much of the consultation material is carried over to the policy statement but there have been some amendments to those matters originally consulted on.

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The Bank of England and Financial Services Act 2016
4th May 2016 - BOE

The Bank of England and Financial Services Bill has been given royal assent and the act confirms the Bank of England’s status at the centre of the UK’s economic and financial systems.

The Bank of England and Financial Services Act 2016 will mean the Bank of England is better equipped to fulfil its vital role of overseeing monetary policy and financial stability for the whole of the UK. It began its passage through Parliament in October and forms a key part in the government’s long term plan to build a resilient economy.

The act is the third major piece of legislation that the government has taken through Parliament to fundamentally reform the financial sector. The Financial Services Act 2012 dismantled the failed tripartite system, putting the Bank of England at the centre of a new framework of financial regulation.

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