1. Bank regulation
1.1 PRUDENTIAL REGULATION
a) General
(i) Germany
Bundesbank: Updated directories of credit institutions and their associations in Germany on banking related information (Aktualisiertes Verzeichnis der Kreditinstitute und ihrer Verbände in der BRD über bankgeschäftliche Informationen)
Status: Final
The German Central Bank (Deutsche Bundesbank – BuBa) has published an updated directory of credit institutions and their associations in Germany on banking related information for 2025. The document lists all credit institutions that conducted banking transactions in accordance with Section 1 of the German Banking Act (Kreditwesengesetz – KWG) in the specified year, as well as two institutions mentioned under Section 2 KWG (BuBa, Kreditanstalt für Wiederaufbau – KfW).
Date of publication: 01/01/2025
(ii) International
FSB: Letter to G20 Finance Ministers
Status: Final
The FSB has published a letter from its Chair, Klaas Knot, to G20 finance ministers and central bank governors ahead of their meeting on 23-24 April. The letter addresses the progress made in tackling global challenges to financial stability and outlines priorities for the future to prevent instability, enhance the resilience of the global financial system and support growth. Key areas of progressinclude: (a) ensuring financial stability through periods of turmoil. The FSB will continue to learn from vulnerabilities caused by previous events such as the banking stress of March 2023 and the COVID-induced market turmoil of March 2020, to ensure effective monitoring of the financial system. The FSB recognises the importance of strengthening the resilience of non-bank financial intermediation (NBFI) and aims to deliver policy recommendations in July to the G20, to address financial stability risks arising from leverage in NBFI; (b) building a financial system that is fit for the future. The FSB will: (i) continue to advance digitalisation in finance and present a thematic review of its global regulatory framework for crypto-asset activities to the G20 later this year; (ii) work to address cyber risks, culminating in the release of the Format for Incident Reporting Exchange (FIRE); (iii) enhance cross-border payments through encouraging the implementation of the G20 roadmap; and (iv) tackle climate-related financial risks through its climate roadmap and framework which assesses climate-related vulnerabilities; and (c) monitoring the implementation and effectiveness of reforms. The FSB emphasises that it is not enough to just develop policies and calls on authorities to remain committed to implementing the agreed international reforms to preserve financial stability in an evolving risk environment and avoid fragmentation.
Date of publication: 23/04/2025
b) Solvency/Own funds issues
(i) Germany
BaFin: Countercyclical capital buffer: indicator values, time series and indicator description (Antizyklischer Kapitalpuffer: Indikatoren, Zeitreihen und Erläuterungen)
Status: Final
BaFin has published its updated data on the countercyclical capital buffer, and has decided to keep this buffer at 0.75 percent. BaFin is aware that the cyclical risks that have built up over the past years have since diminished in the course of the subdued loan dynamics. It is clear, however, that these risks are still substantial. This is compounded by the aforementioned heightened uncertainty regarding the continued economic development and the special risks for the export-dependent German economy. Financing conditions for corporations have deteriorated due to the rise in interest rates. Non-performing loans and insolvencies in the corporate sector are intensifying significantly.
Date of publication: 30/04/2025
BaFin: General Administrative Act on the establishment of a capital buffer for systemic risks pursuant to Section 10e of the German Banking Act (Allgemeinverfügung zur Anordnung eines Kapitalpuffers für systemische Risiken nach § 10e Kreditwesengesetz)
Status: Final
BaFin has published its updated General Administrative Act on the establishment of a capital buffer for systemic risks pursuant to Section 10e of the German Banking Act, establishing a decrease in the sectoral systemic risk buffer for residential mortgage loans from 2 to 1 percent. That is because it finds that the vulnerabilities on the German real estate market have declined significantly, even though they have not yet been fully eliminated. The lowering of the systemic risk buffer from 2 to 1 percent will cause a decrease of around 2 to 2.5 billion euros in the capital currently contained in the banking system. This constitutes around 0.4 percent of the Core Tier 1 capital in the banking sector. The institutions are required to hold the reduced systemic risk buffer from 1 May 2025.
Date of publication: 30/04/2025
(ii) EU
Status: Consultation
Deadline for the submission of comments: 30/05/2025
The EBA has launched a consultation on draft RTS amending Delegated Regulation (EU) 2023/206 supplementing the CRR with regard to RTS specifying the types of factors to be considered for the assessment of the appropriateness of risk weights for exposures secured by immovable property and the conditions to be taken into account for the assessment of the appropriateness of minimum loss given default values for exposures secured by immovable property. This review is driven by the CRR 3, which confers a new mandate on the EBA.
Based on the assessment of the CRR3 changes to the treatment of exposures secured by immovable property, the only proposed amendment to the existing RTS consists of updating the relevant legal references to align with the new banking framework. It is important to note that the original RTS were delivered jointly with another set of technical standards on the appropriateness of the minimum loss given default (LGD) values for retail exposures secured by immovable property. For the sake of simplification and regulatory consistency, the EBA is, therefore, proposing to align both RTS with the CRR3.
Date of publication: 30/04/2025
Status: Adopted by the EC
The EC has adopted a Delegated Regulation supplementing the CRR, containing RTS of the conditions and indicators that the EBA is to use when determining whether extraordinary circumstances under Articles 325az(5) and 325bf(6) of the CRR have occurred. In accordance with Articles 325bf(6) and 325az(5) of the CRR, as amended by CRR 3, competent authorities may permit institutions to derogate from certain requirements of the regulatory framework for the use of internal models, or apply a softer version of those requirements, where, in the opinion of the EBA, a situation involving extraordinary circumstances has occurred. In accordance with Article 325az(9) of the CRR, the occurrence of extraordinary circumstances shall be determined by the EBA, which must issue an opinion to that effect. The Delegated Regulation contains RTS which set out a framework for the EBA to follow when identifying a situation of extraordinary circumstances. The RTS specify that such circumstances could be recognised where there is a situation of significant cross-border financial market stress, or a major regime shift associated with a similar level of stress (e.g., a liquidity crisis), that can render the outcome of the back-testing and profit and loss attribution requirements inappropriate. The RTS also contain a non-exhaustive list of indicators that the EBA is to use to assess whether a situation involving extraordinary circumstances has occurred.
The Council of the EU and the European Parliament will now scrutinise the Delegated Regulation. The Delegated Regulation will enter into force on the twentieth day following its publication in the OJ.
Date of publication: 23/04/2025
EBA: Update to the lists of institutions for the 2025 EU supervisory benchmarking exercise
Status: Final
The EBA has published an updated list of institutions required to report for the 2025 EU supervisory benchmarking exercise. There are 110 institutions involved from 16 countries across the EU and the European Economic Area. The EBA is mandated to conduct the exercise under Article 78 of the Capital Requirements Directive, and the purpose is to assist competent authorities in assessing the quality of internal approaches used to calculate risk-weighted exposure amounts and to enhance alignment of supervisory practices within the regulatory framework.
Date of publication: 08/04/2025
EBA: 2024 reports on market and credit risk benchmarking exercises
Status: Final
The EBA has published its 2024 Reports on the annual market and credit risk benchmarking exercises. Both reports are mandated by Article 78 of the Capital Requirements Directive to assist competent authorities in monitoring the consistency of risk weighted assets (RWAs) across all EU institutions authorised to use internal approaches for the calculation of capital requirements. Regarding market risk, the report summarises the conclusions drawn from a hypothetical portfolio exercise conducted in 2023/24, performed on a sample of 43 European banks from 13 jurisdictions. The results confirm that most participating banks in the exercise have seen a relatively low dispersion in the initial market valuation, though slightly higher compared to 2023. However, there was a decrease in the dispersion of risk measures submissions compared to the previous exercise, as well as variability in general through most exercises, owing to better data submissions by participating banks because of improved instructions, knowledge of the portfolio and the resolution of issues encountered in the previous exercise.
The EBA has also released, for the first time, a specific report on the fundamental review of the trading book Alternative Standardised Approach (ASA). This report expands the findings of the market risk report. In future, benchmarking exercises will be extended to banks that apply the ASA methodology independently of the current requirement to obtain approval to adopt internal models for market risk own funds requirements. For credit risk, the results confirmed that the variability of RWAs remained stable compared to the previous year, but for some asset classes and parameters, a reduction could be observed in the longer run.
Date of publication: 04/04/2025
c) Risk management/SREP/Pillar 2/Outsourcing/NPL
(i) International
BCBS: Amendments to principles for the management of credit risk
Status: Final
BCBS has published a report on its revised principles for the management of credit risk. These principles provide guidance for banking supervisory authorities to evaluate banks' credit risk management processes in four key areas: (i) establishing a suitable credit risk environment; (ii) operating under a sound credit-granting process; (iii) maintaining an appropriate credit administration, measurement and monitoring process; and (iv) ensuring adequate controls over credit risk. The principles were first published 25 years ago and updated following a review to align them with the current Basel Framework and the latest Guidelines issued by the Committee.
Date of publication: 30/04/2025
d) Cyber security
(i) EU
EC: Consultation on a Regulation revising the Cybersecurity Act
Status: Consultation
Deadline for the submission of comments: 20/06/2025
The EC has launched a consultation on a Regulation revising the Cybersecurity Act. The initiative aims to clarify the mandate of the EU Agency for Cybersecurity (ENISA) and improve the European Cybersecurity Certification Framework to achieve better resilience. It also aims to streamline, simplify and supplement EU legislation to make the implementation of the EU cybersecurity framework more user and business friendly and to prioritise measures to support the EU objectives of developing a secure and resilient supply chain, including the EU cybersecurity industrial base.
Date of publication: 11/04/2025
(ii) International
FSB: Publication of finalised format for FIRE framework
Status: Final
The FSB has published its finalised Format for Incident Reporting Exchange (FIRE). FIRE provides a standardised format for financial institutions to report cyber and other operational incidents to national regulators. It is intended to provide a foundation upon which to build for jurisdictions which do not currently have standardised reporting formats, and to be interoperable with existing systems for those jurisdictions with existing frameworks. National regulators are free to decide the extent to which they wish to adopt FIRE, if they do at all. The framework specifies the information items to be included in reports, identifying items which are essential and optional, as well as a baseline view of the reporting of individual information items against each reporting phase. The FSB will hold a workshop with industry and authorities two years after FIRE is finalised (e.g. in 2027) to take stock of their experiences with FIRE, including implementation challenges.
Date of publication: 15/04/2025
e) Remuneration
(i) EU
EBA: Report on benchmarking remuneration trends and practices as well as the gender pay gap
Status: Final
The EBA has issued its latest report on remuneration and gender pay gap benchmarking for institutions and investment firms. The report covers information on remuneration trends and practices from 2021 to 2023 and highlights a material gender pay gap found within EU institutions and investment firms. The data collected shows that on average, female staff in institutions earned 24.48% less in 2023 than their male counterparts. The pay gap was even more pronounced in investment firms, with female staff earning 32.0% and female identified staff earning 31.74% less than their male colleagues. This was mainly caused by an underrepresentation of women in higher paid positions. The EBA emphasises the need for entities to address these disparities with the data raising concerns about the application of the obligation to ensure equal opportunities and pay equity for staff.
Date of publication: 15/04/2025
f) Deposit protection
(i) EU
EBA: Peer review report on the performance of stress tests by deposit guarantee schemes
Status: Final
The EBA has published a peer review report on the findings of a peer review of the performance of stress tests by deposit guarantee schemes (DGS). The aim of the peer review was to assess the performance of stress tests by seven national DGS against five benchmarks stemming from the Deposit Guarantee Schemes Directive and the revised Guidelines on stress tests of DGS. The EBA found that (i) all DGS effectively developed their stress testing programmes in accordance with the methodology outlined in the Guidelines, with only minor shortcomings, (ii) all DGS demonstrated effective cooperation with relevant authorities, with robust stress testing of these arrangements, (iii) five DGS could fully or largely showcase increased severity and complexity of their testing scenarios to adequately stress test their ability to intervene, with one partially demonstrating this and one, not at all, and (iv) five DGS could fully or largely showcase that they identified areas for improvement in their systems and have taken, or have planned to take, measures to address these areas, with only two partially demonstrating this. The report also details several follow-up measures for all EU DGS focusing on the prompt development of stress tests; the performance of stress tests; cooperation; severity and complexity of stress tests; and the identification of areas of improvement. The EBA will conduct a follow-up peer review of the implementation of the measures included in the report in two years.
Date of publication: 07/04/2025
g) Supervisory reporting
(i) EU
EC: Two Delegated and Implementing Regulations supplementing the CRD IV with regard to the functioning of colleges of supervisors
Status: Adopted by the EC
The EC has adopted a Delegated Regulation supplementing the CRD IV, containing RTS specifying the general conditions for the functioning of supervisory colleges, and an Implementing Regulation laying down ITS for the application of the CRD IV with regard to the operational functioning of colleges of supervisors. Article 116 of CRD IV sets out provisions requiring consolidating supervisors to establish colleges of supervisors to facilitate certain supervisory tasks and to ensure appropriate coordination and cooperation with relevant third-country supervisory authorities. In addition, the competent authorities supervising an institution with significant branches in other Member States are, pursuant to Article 51(3) of CRD IV, required to establish and chair colleges of supervisors where Article 116 is not applicable. Article 51(4) of the CRD IV empowers the Commission to adopt delegated acts specifying the general conditions for the functioning of colleges of supervisors. This Delegated Regulation repeals and replaces Delegated Regulation 2016/98 to account for amendments to CRD IV (e.g. in relation to the authorisation of certain financial holding companies and mixed financial holding companies, the establishment of intermediate EU parent undertakings, and removal of investment firms from the scope of CRD IV). It also includes new articles on the exchange of information with the observers of the supervisory college, specifically with resolution colleges and AML and CFT colleges, to enhance cooperation and information exchange with these authorities.
The Council of the EU and the EP will now scrutinise the Delegated and Implementing Regulations. They will enter into force on the 20th day following their publication in the OJ.
- Commission Delegated Regulation (EU) .../... supplementing CRD IV with regard to RTS specifying the general conditions for the functioning of supervisory colleges, and repealing Commission Delegated Regulation (EU) 2016/98
- Commission Implementing Regulation (EU) .../... laying down ITS for the application of the CRD IV with regard to the operational functioning of colleges of supervisors
Date of publication: 23/04/2025
h) Accounting/Prudential filter/Audit
(i) Germany
BaFin: Consultation 09/2025 on the draft bill for the Second Regulation amending the Audit Reporting Regulation (Konsultation 09/2025 über den Referentenentwurf der zweiten Verordnung zur Änderung der Prüfungsberichtsverordnung)
Status: Consultation
Deadline for the submission of comments: 12/05/2025
BaFin has launched a consultation on a draft bill for the Second Regulation amending the German Audit Reporting Regulation. The necessity for this draft was displayed in the evaluation of this Regulation back in 2021, which identified significant need for improvement to adjust to the development of banking supervisory law since its entry into force. These developments include, among others, the application of the Risk Reduction Act (Risikoreduzierungsgesetz) as well as the Second Financial Market Amendment Act (Zweites Finanzmarktnovellierungsgesetz – 2. FinMaNoG), the Financial and Risk-Bearing Capacity Regulation (Finanz- und Risikotragfähigkeitsverordnung – FinaRisikoV), the Institutions Remuneration Regulation (Institutsvergütungsverordnung – InstVergV), the Building Societies Act (Bausparkassengesetz), and the Pfandbrief Act (Pfandbriefgesetz – PfandBG). Further amendments arise from the regulation of algorithmic trading in the Securities Trading Act (Wertpapierhandelsgesetz – WpHG). In addition, due to increasing digitalisation, the purely electronic submission of audit reports should be enabled, as has already been the practice since the beginning of the coronavirus pandemic.
Date of publication: 14/04/2025
1.2 RECOVERY AND RESOLUTION
(i) Eurozone
SRB: Public consultation on the expectations on valuation capabilities
Status: Consultation
Deadline for the submission of comments: 02/07/2025
The SRB has published a press release confirming it had launched a public consultation on its expectations on valuation capabilities. The consultation forms part of the Single Resolution Mechanism's Vision 2028 strategy. The expectations which banks are expected to consider when implementing Principle 5.2 of the SRB's Expectations for Banks requirebanks to have management information systems in place for valuations. The expectations document, which is published alongside the relevant annexes, covers three key areas: (i) valuation data index, which includes an enhanced version of the SRB valuation data set and comprises information and documentation that is already available at bank level and publicly available or accessible to the SRB; (ii) data repositories for resolution, which is expected to be populated with valuation data index (see (i) above) information; and (iii) valuation playbooks.
Date of publication: 02/04/2025
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