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CPMI and the IOSCO begins review of stress testing by central counterparties

Created
Monday, 16 March 2015

                                                              11 Marzo 2015

 

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) announced that they are undertaking a review of stress testing by central counterparties (CCPs). The Principles for Financial Market Infrastructures(PFMI), published by the CPMI and IOSCO in 2012, require CCPs to carry out rigorous stress testing to determine the financial resources they need to manage both credit and liquidity risk, including a wide range of stress scenarios covering a variety of extreme but plausible market conditions.

Related documents

Press release

ESRB publishes report on regulatory treatment of sovereign exposures

Created
Wednesday, 11 March 2015

                                                              10 March 2015

 

The European Systemic Risk Board (ESRB) published a report on the regulatory treatment of sovereign exposures in the books of banks and insurance corporations. These exposures have been seen by many as a source of fragility in the recent and prolonged episodes of financial stress, while others have seen them as a factor of crisis mitigation. According to the ESRB, the current regulatory framework of sovereign exposures needs to be re-examined at a global level.

The report describes the regulatory treatment of sovereign exposures in the European Union, analyses the incentives that it may create, provides data measuring those exposures and offers analytical explanations of recent developments.

Related documents

Press release

Report

News & articles

Draghi-backed report urges review of sovereign debt treatment (Reuters)

Draghi-backed report says sovereign debt no more a risk-free bet (Bloomberg)

European Parliament adopts regulation capping interchange fees and improving competition for card-based payments

Created
Wednesday, 11 March 2015

                                                              10 March 2015

 

The European Parliament adopted regulation capping interchange fees and improving competition for card-based payments. The rules when implemented could lead to a reduction of about €6 billion annually in hidden fees for consumer cards. The “Regulation on Interchange Fees for Card-based Payment Transactions”, which largely follows a Commission proposal from July 2013, will also give more freedom of choice to retailers, enhance transparency for card transactions, and pave the way for innovative payment technologies to be rolled out.

After Parliament’s vote, the rules will need to be officially endorsed by the Council of Ministers before they can take effect, six months after the legislation enters into force.

Related documents

EP press release

EU Commission press release

European Parliament adopts regulation supporting a new investment framework designed to attract investors who want to put their money towards long-term investments in companies

Created
Wednesday, 11 March 2015

                                                               10 march 2015

 

The European Parliament adopted regulation supporting a new investment framework designed to attract investors who want to put their money towards long-term investments in companies and projects. These private European Long-Term Investment Funds (ELTIFs) aim to boost the finance available to companies in search for long-term capital for projects relating to energy, transport but also social housing, schools and hospitals.

After the full House votes on these rules, which have been already been informally approved by the member states, the rules must be officially endorsed by the Council and they should apply 6 months after their entry into force.

Related documents

EP press release

EU Commission press release

Frequently asked questions

ESMA clarifies its interest rate swaps clearing standards

Created
Tuesday, 10 March 2015

                                                              09 March 2015

 

The ESMA published a revised opinion on its draft Regulatory Technical Standard (RTS) on the clearing obligation for Interest Rate Swaps (IRS).

The ESMA regulation gives the opportunity to consider the amendments and provide further input where the draft RTS can benefit from the technical input from the Authority. There are some points among the changes that the European Commission (EC or Commission) intends to introduce that ESMA considers should be reviewed or improved and that are discussed below. They have been reflected in the second version of the draft RTS submitted to the Commission with this opinion (Annex I).

Related document

Press release

Draft RTS

EBA defines requirements for business reorganisation plans

Created
Tuesday, 10 March 2015

                                                              09 March 2015

 

The EBA launched a public consultation on its draft Regulatory Technical Standards (RTS) on the content of "Business Reorganisation Plans and Progress Reports" and Guidelines on the assessment of these plans. The RTS and the Guidelines have been developed within the framework established by the Bank Recovery and Resolution Directive (BRRD) which sets procedures for the recovery and resolution of credit institutions, investment firms and related entities across the EU.

The consultation runs until 9 June 2015.

Related documents

Press release

Consultation paper

Federal Reserve releases results of supervisory bank stress tests

Created
Monday, 09 March 2015

                                                              05 March 2015

 

The Federal Reserve released results of supervisory bank stress tests. This is the fifth round of stress tests led by the Federal Reserve since 2009 and the third round required by the Dodd-Frank Act. The 31 firms tested represent more than 80 percent of domestic banking assets. The Federal Reserve uses its own independent projections of losses and incomes for each firm. The quantitative results from the Dodd-Frank stress tests are one component of the Federal Reserve's analysis during the Comprehensive Capital Analysis and Review (CCAR), which is an annual exercise to evaluate the capital planning processes and capital adequacy of large financial institutions. CCAR results will be released on Wednesday, March 11.

Related documents

Press release

Dodd Frank Act Stress Test 2015

News & Articles

Fed Says 31 U.S. Banks Could Weather an Economic Storm (Bloomberg)

Big Banks Pass Muster in Latest Stress Tests (The New York Times)

EBA advises on resolution procedures for EU banks

Created
Monday, 09 March 2015

                                                              06 March 2015

 

The EBA issued advice to the European Commission on the resolution framework for EU banks, covering the definition of critical functions and core business lines, as well as rules for the exclusion of liabilities from the application of the bail-in tool.The EBA advice on critical functions is based on its work on rules for recovery planning and on a comparative analysis of the recovery plans of 27 European cross-border banking groups which identified key strengths and weaknesses in banks' approaches.

 

Related documents

Press release

Technical Advice

EBA consults on records of financial contracts

Created
Monday, 09 March 2015

                                                              06 March 2015

 

The EBA launched a public consultation on draft Regulatory Technical Standards (RTS) on detailed records of financial contracts of institutions or relevant entities. These RTS have been developed within the framework established by the Bank Recovery and Resolution Directive (BRRD) which sets procedures for the recovery and resolution of credit institutions, investment firms and related entities across the EU Single Market.

This consultation runs until 6 June 2015.

Related documents

Press release

Consultation paper

EBA, EIOPA and ESMA consult on draft technical standards on the credit quality steps for ECAIs credit assessments

Created
Monday, 09 March 2015

                                                              06 March 2015

 

The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) launched a consultation on draft Implementing Technical Standards (ITS) on the allocation of External Credit Assessment Institution (ECAIs) to an objective scale of credit quality steps under Solvency II.

The ITS contains a table assigning the appropriate Credit Quality Steps to the rating categories of ECAIs.The overall objective of this ITS is to reach consistency between the banking and the insurance framework in this area.The public consultation will end on 10 April 2015.

Related documents

Press release

Consultation paper

ESMA and RBA conclude MoU on access to data held in trade repositories

Created
Thursday, 05 March 2015

                                                              05 March 2015

 

The ESMA and the Reserve Bank of Australia (RBA) concluded a Memorandum of Understanding (MoU) that will allow RBA to have access to data held in European Trade repositories according to its mandate.

The MoU is effective as of 18 February 2015.

 

 

Related documents

Press release

Memorandum

EBA puts forward preliminary proposals to improve the IRB regulatory framework

Created
Thursday, 05 March 2015

                                                              04 March 2015

 

The EBA launched a discussion paper on the regulatory measures needed to ensure a robust and clear framework for Internal Ratings Based (IRB) models. The discussion paper seeks stakeholders' feedback on both how to implement the necessary measures in a consistent way and how to bring forward future changes to the current approach. In addition, an overview of the regulatory measures that are under way is provided.

The consultation will run until 5 May 2015.

Related documents

Press release

Discussion paper

EBA reviews guidelines on remuneration policies

Created
Thursday, 05 March 2015

                                                              04 March 2015

 

The EBA launched a three-month public consultation on its Guidelines on sound remuneration policies. These draft Guidelines set out the governance process for implementing sound remuneration policies across the EU, as well as the specific criteria for mapping all remuneration components into either fixed or variable pay.

Consultation will run until 4 June 2015.

Related documents

Press release

Consultation Paper

Basel III: BCBS and EBA publish results of the Basel III monitoring exercise as of 30 June 2014

Created
Tuesday, 03 March 2015

                                                              03 March 2015

 

At a global level

The BCBS published the results of its latest Basel III monitoring exercise.

The results of the monitoring exercise assume that the final Basel III package is fully in force, based on data as of 30 June 2014.

A total of 224 banks participated in the current study, comprising 98 large internationally active banks ("Group 1 banks", defined as internationally active banks that have Tier 1 capital of more than €3 billion) and 126 Group 2 banks (ie representative of all other banks).

Data as of 30 June 2014 show that all large internationally active banks now meet the Basel III risk-based capital minimum requirements. Moreover, capital shortfalls relative to the higher target levels have been further reduced. For example, at the Common Equity Tier 1 (CET1) target level of 7.0% (plus the surcharges on global systemically important banks - G-SIBs - as applicable), the aggregate shortfall for Group 1 banks is €3.9 billion, compared to €15.1 billion on 31 December 2013 and €485.6 billion on 30 June 2011. As a point of reference, the sum of after-tax profits prior to distributions across the same sample of Group 1 banks for the six-month period ending 30 June 2014 was €210.1 billion.

Related documents

Press release

Basel III monitoring report

 

At a European level

The EBA published its seventh report of the Basel III monitoring exercise on the European banking system.

Results show that theCommon Equity Tier 1 capital ratio (CET1)of the largest internationally-active European banks (Group 1 banks) would be on average10.8% compared to a ratio of 11.7%under the current implementation of the regulation. None of the Group 1 banks would face aCET1 capital shortfall to achieve the minimum requirement of 4.5%, while they would be short of EUR 2.8 billion to reach the 7.0% level (minimum CET1 of 4.5% + capital conservation buffer of 2.5%). The shortfall figure remains the same when the surcharge for global systemically important banks (G-SIBs) is considered.

Related documents

Press release

Basel III monitoring Report

EBA updates on future EU-wide stress tests

Created
Tuesday, 03 March 2015

                                                              03 March 2015

 

 

The Board of Supervisors of the EBA decided not to carry out an EU-wide stress test in 2015 and to start preparing for the next exercise in 2016. The decision not to run an EU-wide stress test in 2015 was driven by an acknowledgement of the progress that EU-banks have made in strengthening their capital positions in response to the 2014 asset quality reviews and EU-wide stress test.

Related documents

Press release

EBA letter to EP, EC and Council - Decision EU-wide stress test 2015

Money Market Funds: ECON Committee votes on proposed regulation

Created
Tuesday, 03 March 2015

                                                          26 February 2015

 

ECON Committee approved a draft law that would make MMFs more resilient to financial crises.

They are an important source of short-term financing for financial institutions, corporates and governments and provide highly liquid short-term financing, to investors seeking to diversify their portfolios, for business start-ups and small and medium-sized enterprises (SMEs).

However, they need to become more resilient to crises, as the last one showed that they may be unstable and vulnerable to runs and contagion, if most of their investors withdraw their funds at the same time in response to market turbulence.

Related document

Press release

Next steps

The text adopted by the ECON MEPs will be put to vote by the full House to consolidate the Parliament's position before the negotiations with the member states. The vote is planned for April.

EIOPA publishes solvency II relevant risk free interest rate term structures

Created
Monday, 02 March 2015

                                                              02 March 2015

 

The (EIOPA) published the Solvency II relevant risk free interest rate term structures. This information is a key input for the assessment of the (re)insurance companies’ solvency and financial position.

Term structures for 31 January and 28 February 2015 will be released in the beginning of March 2015

 

Related document

Press release

EBA publishes new DPM and XBRL taxonomy for remittance of supervisory reporting as of 30 June 2015

Created
Monday, 02 March 2015

                                                              02 March 2015

 

The EBA published a new XBRL taxonomy to be used by competent authorities for remittance of data under the EBA Implementing Technical Standards (ITS) on supervisory reporting. The new taxonomy will have as reference date 30 June 2015 onwards and will be used for the first reports on additional liquidity monitoring metrics and supervisory benchmarking.

 

Related document

Press release

EBA delivers benchmarking package

Created
Monday, 02 March 2015

                                                              02 March 2015

 

The EBA published a set of papers for benchmarking the internal approaches that EU institutions use to calculate own-funds requirements for credit and market risk exposures.The EBA standards define the benchmarking portfolios as well as the methodology that competent authorities across the EU shall use in order to assess the quality of institutions' internal approaches for capital calculation purposes.

Institutions shall report the information by 11 April 2016.

Related document

Press release

EBA consults on prudential requirements for central securities depositories

Created
Monday, 02 March 2015

                                                          27 February 2015

 

The EBA launched a public consultation on draft Regulatory Technical Standards (RTS) on prudential requirements forcentral securities depositories (CSDs).These RTS have been developed within the framework established by theRegulation on settlement and Central Securities Depositories(CSD-R),which aims to increase the safety and efficiency of securities settlement and settlement infrastructures.

The consultation runs until 27 April 2015.

Related documents

Press release

Consultation paper

  • Last Update: Wednesday 01 April 2015, 17:02.
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