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Latest news of financial regulation

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FSB publishes its fourth annual global shadow banking monitoring report

Created
Wednesday, 05 November 2014

05 November 2014

 

The FSB published its fourth annual Global Shadow Banking Monitoring Report. The report presents data as of end-2013 from 25 jurisdictions and the euro area as a whole, covering about 80% of global GDP and 90% of global financial system assets. By absolute size, advanced economies have the largest shadow banking sectors, while emerging market jurisdictions recorded the fastest growth rates. While the non-bank financial system may contribute to financial deepening, careful monitoring is still required to detect any increases in systemic risk factors (e.g. maturity and liquidity transformation, and leverage) that could arise from the rapid expansion of credit provided by the non-bank sector.

 

Related documents

Press release

Report

FSB publishes third progress report on compensation practices

Created
Wednesday, 05 November 2014

05 November 2014

 

The FSB published the third progress report on the implementation of the FSB principles for sound compensation practices and their implementation standards (P&S) by FSB jurisdictions. The report finds that the implementation of the P&S is now essentially completed. A few FSB jurisdictions have not adopted one or a few P&S due to their non-applicability or incompatibility with local laws; these jurisdictions should assess the risks posed by remaining gaps and take appropriate measures to address them. Some implementation challenges remain, in particular the application of risk metrics at the level of business units,  products, individual employees level; a more transparent and consistent application of policies to guide the use of discretion in setting compensation.

 

Related documents

Press release

Report 

The ECB assumes full responsibility as the Single Supervisor in the Banking Union

Created
Tuesday, 04 November 2014

                                                        04 November 2014

 

The ECB fully assumed supervisory tasks and responsibilities in the framework of the Single Supervisory Mechanism (SSM). The SSM is a new system of banking supervision for Europe, comprising the ECB and the national supervisory authorities of the participating countries. Its main aims are to:

  • - ensure the safety and soundness of the European banking system
  • - increase financial integration and stability
  • - ensure consistent supervision

The SSM is one of the two pillars of the EU banking union, along with the Single Resolution Mechanism.

 

Solvency II: EIOPA consults on a technical document regarding the risk free interest rate term structure

Created
Monday, 03 November 2014

                                                        02 Novemebr 2014

 

The EIOPA launched a consultation paper on a technical document regarding the risk free interest rate term structure.The risk free interest rate term structure underpins the calculation of liabilities by insurance and reinsurance undertakings.

The consultation runs until 21 November 2015.

 

 

Related documents

Consultation paper

Consultation web page

Bank Capital Requirements: FPC publishes its final review setting out proposals for the design of the leverage ratio framework

Created
Monday, 03 November 2014

The Financial Policy Committee (FPC) published its final review setting out proposals for the design of the leverage ratio framework, including its views on the calibration of that framework.

The FPC sees a strong case for introducing a leverage ratio framework ahead of an internationally agreed standard for G-SIBs and other major domestic UK banks and building societies. This reflects the number of systemically important institutions present in the United Kingdom; the size of the UK banking system relative to the domestic economy; and the importance, therefore, of being able to manage effectively model risk and to respond consistently to risks to financial stability that might emerge before an international standard on leverage is agreed and implemented.

Related document

FPC Leverage Ratio Review


Bank Capital Requirements: EBA consults on materiality threshold of credit obligation past due

Created
Monday, 03 November 2014

                                                             31 October 2014

 

The EBA launched a public consultation on its draft Regulatory Technical Standards (RTS) on materiality threshold of past due credit obligations. The EBA proposes a series of new conditions against which National Supervisory Authorities (NSAs) should set a materiality threshold for past due credit obligations.

The consultation runs until 31 January 2015.

 

Related documents

Press release

Consultation Paper

Solvency II: EIOPA submitted to the EC for endorsement the first set of draft Solvency II ITS

Created
Monday, 03 November 2014

31 October 2014

 

The EIOPA submitted to the European Commission for endorsement the first set of draft Solvency II Implementing Technical Standards (ITS). The current ITS define the processes for approval of the Internal Models, Matching Adjustment, Ancillary Own Funds, Undertaking-Specific Parameters and Special Purpose Vehicles as well as the joint decision process on Group Internal Models.

The ITS are addressed both to undertakings and national supervisors. Their purpose is to guarantee that (re)insurers present all information that is necessary for supervisors to give a legally certain and prudentially sound approval of key elements of Solvency II.

 

Related document

Press release

Solvency II: EIOPA publishes the Action Plan 2015/16 for Colleges and a list of cross-border insurance groups for which a college is in place

Created
Monday, 03 November 2014

                                                          31 October 2014

 

The EIOPA published the Action Plan 2015/16 for Colleges of supervisors (Colleges) and the list of cross-border insurance and re-insurance groups for which a College is in place. The focus of the two-year Action Plan 2015/2016 for Colleges is the implementation of Solvency II in 2016 and the major changes for supervision under the new regulation.

 

Related documents

Press release

Action plan

 

The EIOPA also published final report on the public consultation No. 14/010 on Guidelines on operational functioning of colleges (EIOPA related web page).

Prudential requirements: EBA advises on the application of prudential requirements for credit and investment institutions

Created
Monday, 03 November 2014

                                                           31 October 2014

 

The EBA published an opinion addressed to the European Commission on the appropriateness of the rules governing the levels of application of prudential requirements for credit and investment institutions (Pillar 1 and 2), in particular the exemption regime.

This Opinion follows a call for advice by the European Commission asking the EBA to look into whether the waivers under Pillar 1 and Pillar 2 are prudentially justified and whether they should be modified.

 

 

Related documents

Press release

Opinion

Prudential requirements: ESAs publishes addendum to joint consultation on mapping of External Credit Assessment Institutions (ECAIs)

Created
Monday, 03 November 2014

                                                           31 October 2014

 

The Joint Committee of the three European Supervisory Authorities (EBA, ESMA and EIOPA - ESAs) published an addendum to the joint consultation on the mapping of the credit assessments to risk weights of External Credit Assessment Institutions (ECAIs). The addendum provides further details on the application of the rules proposed in the draft Implementing Technical Standards (ITS) in relation to particular ECAIs and is to be considered as an extension of the consultation process.

The consultation will close on 30 November 2014.

 

Related documents

Press release

Consultation paper (Addendum)

Prudential requirements: European Commission assesses economic consequences of country-by-country reporting requirements set out in CRD IV

Created
Monday, 03 November 2014

                                                           31 October 2014

 

The European Commission adopted a report containing a general assessment of the economic consequences of country-by-country reporting (CBCR) by banks and investment firms under Article 89 of Directive 2013/36/EU (CRD IV). The key objective of the Commission's report is to assess whether CBCR leads to significant negative economic effects.

The results of the econometric analysis suggest that improved disclosure quality would lead to a number of positive outcomes:

- greater disclosure quality can lead to a reduction in the cost of equity capital;

- it can also lead to a reduction in the ability of reporting institutions to mask their true performance;

- an increased accounting quality which could result in greater competitiveness and increased financial stability.

 

Related documents

Press release

Report

EC related web page

Financial markets infrastructures: first 'equivalence' decisions for central counterparty regulatory regimes adopted

Created
Monday, 03 November 2014

                                                          30 October 2014 

 

The European Commission adopted its first 'equivalence' decisions for the regulatory regimes of central counterparties (CCPs) in Australia, Hong Kong, Japan and Singapore.

The CCPs in these third country jurisdictions will be able to obtain recognition in the EU, and can therefore be used by market participants to clear standardised OTC derivatives as required by EU legislation, whilst remaining subject solely to the regulation and supervision of their home jurisdiction.

 

Related document

Press release

Banking union: ECB publishes Regulation on supervisory fees

Created
Monday, 03 November 2014

                                                           30 October 2014

 

The ECB published the ECB Regulation on supervisory fees. The document sets out how the ECB recovers its expenditures for supervising the banking sector covered by the Single Supervisory Mechanism and reflects comments received from interested parties during the public consultation.

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

 

Related documents

Press release

Regulation

Feedback statement

Shadow Banking: FSB publishes fourth annual Global Shadow Banking Monitoring Report

Created
Monday, 03 November 2014

                                                           30 October 2014

 

The FSB published its fourth annual Global Shadow Banking Monitoring Report. The report presents data as of end-2013 from 25 jurisdictions and the euro area as a whole, covering about 80% of global GDP and 90% of global financial system assets. By absolute size, advanced economies have the largest shadow banking sectors, while emerging market jurisdictions recorded the fastest growth rates. While the non-bank financial system may contribute to financial deepening, careful monitoring is still required to detect any increases in systemic risk factors (e.g. maturity and liquidity transformation, and leverage) that could arise from the rapid expansion of credit provided by the non-bank sector.

 

Related documents

Press release

Report

Basel III: BCBS publishes final standard for the Net Stable Funding Ratio

Created
Monday, 03 November 2014

                                                           31 October 2014

 

The BCBS issued the final standard for the Net Stable Funding Ratio ("NSFR"), as endorsed by the Committee's governing body, the Group of Central Bank Governors and Heads of Supervision.

The NSFR is a significant component of the Basel III reforms. It requires banks to maintain a stable funding profile in relation to their on- and off-balance sheet activities, thus reducing the likelihood that disruptions to a bank's regular sources of funding will erode its liquidity position in a way that could increase the risk of its failure and potentially lead to broader systemic stress.

The NSFR will become a minimum standard by 1 January 2018.

 

 

Related documents

Press release

Final standard

Commission delegated regulation with regard to RTS on the identification of the geographical location of the relevant credit exposures for calculating institution-specific countercyclical capital buffer rates published on the O.J.E.U.

Created
Thursday, 30 October 2014

                                                           30 October 2014

 

Commission delegated regulation (EU) No 1152/2014 supplementing Directive 2013/36/EU (CRD IV) with regard to regulatory technical standards on the identification of the geographical location of the relevant credit exposures for calculating institution-specific countercyclical capital buffer rates has been published on the Official Journal of the EU.

 

 

This Regulation shall enter into force on 19 November 2014.

 

Related document

Commission delegated regulation

Commission delegated regulation with regard to RTS on the information to be notified when exercising the right of establishment and the freedom to provide services published on the O.J.E.U.

Created
Thursday, 30 October 2014

                                                           30 October 2014

 

Commission delegated regulation (EU) No 1151/2014 supplementing Directive 2013/36/EU (CRD IV) with regard to regulatory technical standards on the information to be notified when exercising the right of establishment and the freedom to provide services has been published on the Official Journal of the EU. 

 

This Regulation shall enter into force on 19 November 2014.

 

Related document

Commission delegated regulation

Commission delegated regulation with regard to RTS on the minimum monetary amount of the professional indemnity insurance or comparable guarantee to be held by credit intermediaries published on the Official Journal of the EU

Created
Wednesday, 29 October 2014

                                                             24 October 2014

 

 

Commission delegated regulation (EU) No 1125/2014 supplementing Directive 2014/17/EU with regard to regulatory technical standards on the minimum monetary amount of the professional indemnity insurance or comparable guarantee to be held by credit intermediaries has been published on the Official Journal of the EU.

The Regulation shall enter into force on 13 November 2014.

Related document

Commission delegated regulation

EU Council Presidency publishes compromise text on proposed regulation on financial benchmarks

Created
Wednesday, 29 October 2014

                                                             27 October 2014

 

 

EU Council Presidency published compromise text on proposed regulation on indices used as benchmarks in financial instruments and financial contracts. The draft proposal seeks to introduce a common framework to ensure the accuracy and integrity of indices used as benchmarks in financial instruments and financial contracts in the Union.

Related document

Presidency compromise

News & articles

EU transaction tax bid falters on revenue disagreement (Bloomberg)

EU benchmarks plan too demanding of other nations, lawmaker says (Bloomberg)

Next step

Council position

Vote in EP’s ECON Committee

FSB publishes report on cross-border consistencies and global financial stability implications of structural banking reforms

Created
Wednesday, 29 October 2014

                                                             27 October 2014

 

 

FSB published report on cross-border consistencies and global financial stability implications of structural banking reforms. A broad aim of many structural banking reforms is therefore to introduce a separation between certain ‘core’ banking activities and the risks emanating from investment banking and capital market activities. The reforms are designed to reduce risks to banking groups stemming from trading activities, limit the range of activities covered by the public safety net, and more generally to simplify legal and operational structures of complex banking groups.

Related document

Report

  • Last Update: Thursday 29 January 2015, 16:32.
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Highlights (month 18 Dec 2014 - 14 Jan 2015)