1. BANK REGULATION
1.1 Prudential Regulation
a) General
(i) EU
ECON: Study on the EU Banking Sector and Competitiveness
Status: Final
The study on enhancing EU competitiveness in the banking sector, requested by the ECON, has been published by the Economic Governance and EMU Scrutiny Unit. The study emphasises the importance of a resilient and efficient banking sector for EU competitiveness. Building on its analysis, the study recommends that, to achieve this, the EU should first prioritise the defragmentation of the banking market, and then, simplify and streamline the prudential framework for banks without compromising resilience.
In line with these priorities, it sets out the following recommendations for the EC to address in its forthcoming 2026 report on the EU banking sector: (i) completion of the Banking Union to enhance the EU-wide allocation of credit by moving closer to the goal of a single banking system and to strengthen financial resilience by eliminating the threat of the bank-sovereign cycle; (ii) integration of macroprudential decision-making in the banking union and simplifying the capital stack, including the set of loss-absorbing requirements, to reduce complexity and allow banks, particularly medium-sized ones, to focus more on core lending activities; and (iii) complementary reforms as additional options to support the two higher-priority recommendations above, including: (a) elimination of national gold plating; (b) harmonisation of accounting, by considering the imposition of mandatory international financial reporting standards (IFRS) for consolidated financial statements of all EU banks, and potentially a simplified IFRS for SMEs for individual accounts; (c) enhancement of consumer protection, starting with a comprehensive comparison of consumer protection regimes in all member states; and (d) improving supervisory practices.
Date of publication: 26/05/2025
(ii) International
BCBS: Discussion of key initiatives
Status: Final
The BCBS has published the results from its meeting to discuss a range of initiatives. The discussions focused on:
(i) recent market developments and the financial stability outlook for the global banking system; (ii) progress on efforts to strengthen supervisory effectiveness following the 2023 banking turmoil. An update on the outcome of this work will be published by the end of the year; (iii) comments received to the BCBS consultation on third-party risk management in the banking sector. The BCBS aims to finalise principles for third-party risk management by the end of 2025; (iv) the use of technological innovation to make Pillar 3 disclosures more accessible in machine- readable formats. The BCBS plans to consult on this proposal by the end of the year; and (v) prioritising the analysis of financial risks from extreme weather events. The BCBS is also mandated to publish the voluntary climate-related financial risk disclosure framework, which will be released in June.
Date of publication: 21/05/2025
Status: Final
The FSB has published a speech delivered by Martin Moloney, Deputy Secretary General of the FSB, at the International Council of Securities Associations' Annual General Meeting on the potential for reforming financial regulation in a way that supports, rather than stifles, economic growth. Mr Moloney places particular emphasis on pursing sustainable economic growth, supported by stable financial markets, for effective regulatory reform and warns against cycles of deregulation and re-regulation. He urges policymakers to critically assess and streamline existing regulatory regimes, noting that both legislative and rule-making processes often fall short in designing optimal regulatory frameworks. Mr Moloney outlines three key challenges with effective regulatory redesign:
(i) complexity of objectives: regulatory tools must now serve multiple goals, which can make it difficult to calibrate them proportionately; (ii) industry consultation; while essential, industry feedback tends to gravitate toward consensus on the 'lowest common denominator', not necessarily reflecting the changes that industry would most benefit from; and (iii) global interdependence; regulatory reform is constrained by the need for international consistency as jurisdictions cannot diverge significantly from global norms when creating national-based legislation without facing cross-border consequences.
Date of publication: 20/05/2025
Status: Final
The BCBS has published a press release regarding the results of the recent meeting by the Group of Central Bank Governors and Heads of Supervision (GHOS). In particular, the participants unanimously reaffirmed their expectations to implement Basel III in full and consistently as soon as possible, noting that approximately 70% of member jurisdictions have now implemented, or will shortly implement, the standards. The GHOS tasked the Committee with continuing to monitor and assess the full and consistent implementation of Basel III. GHOS members also discussed the Committee's proposed Pillar 3 disclosure framework for climate-related financial risks. The Basel Committee will publish a voluntary disclosure framework for jurisdictions to consider. In addition, the GHOS discussed the Committee's broader work on climate-related financial risks and tasked the Committee with prioritising its work to analyse the impact of extreme weather events on financial risks.
Date of publication: 12/05/2025
b) Solvency/Own funds issues
(i) EU
EBA: Opinion on measures in accordance with Article 458 CRR
Status: Final
The EBA has published an opinion in response to a notification from the Norwegian Ministry of Finance regarding its intention to recalibrate the risk weight floor for Norwegian retail residential real estate exposures under Article 458 CRR. The measure, initially introduced on 31 December 2020 and extended until 30 June 2025, will result in the risk weight floor increasing from 20% to 25% starting from 1 July 2025 and remaining in force until 31 December 2026. It applies to all institutions established in Norway that use the Internal Ratings Based approach to calculate capital requirements for relevant exposures, seeking to address systemic risks arising from high household debt and rising real estate prices. The EBA supports the measure but invites the Ministry of Finance to closely monitor and review it to ensure proportionality and avoid overlaps with other regulatory requirements and measures already in place.
Date of publication: 23/05/2025
EBA: Repeal of Guidelines on specification of types of exposures to be associated with high risk
Status: Final
The EBA has repealed its Guidelines on the specification of types of exposures to be associated with high risk. The decision follows the application of the new CRR 3 which no longer includes the high-risk exposure class and now only refers to subordinated debt exposures. As a result, the guidelines are no longer applicable.
Date of publication: 16/05/2025
Status: Published in the OJ
Date of entry into force: 28/05/2025
The Delegated Regulation (EU) 2025/878 amending RTS on technical details of back-testing and profit and loss attribution requirements, the criteria for assessing the modellability of risk factors, and the treatment of foreign- exchange risk and commodity risk in the non-trading book, has been published in the OJ. The amendments are being made to reflect amendments made to the CRR which introduced a number of remaining BCBS requirements which are yet to be implemented and some clarifications, including changes to ensure alignment with BCBS international standards.
Key amendments include: (i) updated criteria for classifying trading desks and the removal of the aggregation formula for back-testing and profit and loss attribution requirements; (ii) adjusting documentation requirements to support competent authorities on whether institutions can use market data provided by third-party vendors in the assessment of modellability of risk factors; and (iii) clarifying the calculation of own funds requirements for market risk related to non-trading book positions.
Date of publication: 08/05/2025
Status: Published in the OJ
Date of entry into force: 25/05/2025
The Commission Delegated Regulation (EU) 2025/855 amending the RTS laid down in Delegated Regulation (EU) 2021/931 as regards the specification of the formula for calculating the supervisory delta of call and put options mapped to the commodity risk category, has been published in the OJ. The RTS specifies the formula for calculating the supervisory delta of call and put options mapped to the commodity risk category. This is based on the approach taken in the Basel Framework (CRE52) and, for the purposes of Article 279a(3) CRR, in the standardised approach for counterparty credit risk. The CRR III expanded the scope of Article 279a(3) CRR to cover commodity risk, which required amendment to the RTS.
Date of publication: 05/05/2025
c) Liquidity
(i) EU
EBA: Updated report on monitoring of LCR and NSFR
Status: Final
The EBA has published an updated report on the monitoring of the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR) in the European Union. This report provides updated guidance following the March 2023 banking turmoil, which highlighted the need for enhanced supervision of liquidity aspects resulting from changes in interest rates and related trends in deposit behaviour and concentrations. Among other things, the report:
(i) provides further clarification for the recognition in the LCR calculation of LCR inflows from open reverse repos without a maturity date within 30 days, following Q&A 2024_7053 (published on 3 May 2024). It builds on two approaches, the first of which builds on the occurrence of a trigger event to terminate the transaction, and the second one on historical experience; (ii) considers how recently, in some banks, operational deposits increased while excess operational deposits decreased, and how the interest rate environment changed. In this context, the Report supplements the guidance provided in the EBA's 2019 Report on identifying operational deposits, the characteristics of the operational deposit trade cycle, and the material penalty for retail term deposits; and (iii) includes an Addendum to the EBA's 2023 Report on interdependent assets and liabilities in the NSFR. It clarifies regulatory expectations regarding indirect client clearing activities, where affiliated institutions, rather than an institutional protection scheme (IPS) structure – which is already covered in the 2023 Report – are involved. The EBA will continue monitoring some specific aspects of the LCR and NSFR due to current circumstances and the interest rate environment to set out its observations and provide further guidance, where necessary. The EBA will also assess further the need to amend/complement the existing regulatory reporting on liquidity requirements.
Date of publication: 14/05/2025
d) Risk management/SREP/Pillar 2/Outsourcing/NPL
(i) EU
EC: Call for advice to EBA for second benchmarking of national loan enforcements frameworks
Status: Final
The EC has published a call for advice to the EBA together with a letter from John Berrigan, Directorate-General of Financial Stability, Financial Services and Capital Markets Union (DG FISMA). The EC asks the EBA to conduct a second benchmarking exercise on national loan enforcement frameworks from a bank creditor perspective, following the initial exercise conducted in 2019-2020. The benchmarking will assess the efficiency of enforcement procedures in terms of recovery rates, time to recovery and judicial costs.
The EBA is expected to deliver a preliminary analysis by July 2025, with the final report due by 31 October 2025.
Date of publication: 21/05/2025
e) Cyber security
(i) EU
Status: Published in the OJ
A corrigendum to Commission Delegated Regulation (EU) 2024/1774, which supplements DORA, has been published in the OJ. Commission Delegated Regulation (EU) 2024/1774 contains RTS specifying ICT risk management tools, methods, processes and policies and the simplified ICT risk management framework. It reflects mandates under Articles 15 and 16(3) of DORA. The corrigendum replaces a reference to Article 15 of Commission Delegated Regulation (EU) 2024/1772 in Article 22 of the Delegated Regulation (ICT-related incident management policy) with a reference to Article 8(2) of that Delegated Regulation.
Date of publication: 15/05/2025
f) Deposit protection
(i) EU
Status: Final
The EBA has published end-2024 data related to two key concepts and indicators in the Deposit Guarantee Schemes Directive (DGSD), namely financial means available to, and covered deposits protected by, national deposit guarantee schemes. The EBA publishes this data for each Member State, on a yearly basis to enhance the transparency and public accountability of DGSs across the EU to the benefit of depositors, markets, policymakers, DGSs and Members States. Following a ten-year build-up phase, the EU DGS funds have reached €79bn of available means in aggregate.
Date of publication: 21/05/2025
g) Disclosure
(i) EU
Status: Consultation
Deadline for the submission of comments: 22/08/2025
The EBA has launched a consultation proposing amendments to Commission Implementing Regulation (EU) 2024/3172 on the EBA Pillar 3 disclosure framework, aligning it with the requirements of CRR III on ESG-related risks, equity exposures and aggregate exposure to shadow banking entities. The consultation also seeks to finalise the implementation of prudential disclosure requirements included in the EU banking package published in 2024.
Through the amendments, the EBA aims to improve the transparency and consistency of disclosures while also simplifying the reporting process for institutions.
The EBA also intends to provide an updated mapping tool to help institutions align Pillar 3 disclosures with supervisory reporting requirements. The final ITS are expected to be submitted to the EC by Q4 2025.
Date of publication: 22/05/2025
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