1. Bank regulation
1.1 PRUDENTIAL REGULATION
a) General
(i) EU
EBA: Speech on efficiency and effectiveness of EU financial regulation
Status: Final
The EBA published a keynote speech delivered by its Chairperson, José Manuel Campa, at a high-level meeting for European supervisors in Ljubljana, Slovenia, on the importance of an efficient and effective financial services regulatory framework to support sustainable growth while enhancing EU competitiveness. While acknowledging the effectiveness of the current framework, particularly in ensuring financial stability, Mr Campa recognises concerns around its complexity and proportionality, understanding the need for greater simplification efforts. He outlines four key areas in which the EBA sees room for improvement:
- How its regulatory products are developed, including regulatory technical standards, implementing technical standards, Guidelines, and Q&As. The EBA aims to: (i) review whether existing level 2 and level 3 regulation remain fit for purpose and can be implemented by institutions that are subject to these standards in a simple and efficient manner; (ii) streamline and simplify rules where possible (e.g. on remuneration); (iii) better assess the impact of each mandate for stakeholders and prioritise mandates based on their impact and urgency; and (iv) contribute to the EU co-legislators' ongoing review of level 2 mandates to improve the efficiency of the EU Single Rulebook.
- Reducing the reporting burden, by ensuring data requests are risk-based, relevant and fit for purpose. The EBA also seeks to enhance proportionality and reduce duplications and ad-hoc requests through closer coordination with supervisory and other competent authorities.
- Strengthening supervisory convergence, by reviewing all available tools, such as peer and thematic reviews, with the objective of using them to their full potential and with the right objective.
- Promoting regulatory coherence. The EBA seeks to share its views on how prudential regulation interacts with other EU financial rules, although acknowledging this may extend beyond its direct remit. It sees value in contributing to the EC's upcoming report on the effectiveness of the Banking Union, as part of its effort to assess whether current rules are aligned with its objectives.
Date of publication: 02/06/2025
b) Solvency/Own funds issues
(i) Germany
BaFin: General Administrative Act on the reciprocal application of an Italian systemic risk capital buffer (Allgemeinverfügung zur reziproken Anwendung eines italienischen Kapitalpuffers für systemische Risiken)
Status: Final
BaFin published a General Administrative Act on the reciprocal application of an Italian systemic risk buffer pursuant to Section 10e(9) of the German Banking Act (Kreditwesengesetz – KWG), recognising this capital buffer. It announced that it will only apply this buffer to German institutes with material exposure in Italy.
Date of publication: 30/06/2025
(ii) EU
EBA: Technical standards on operational risk capital requirements and supervisory reporting
Status: Final
The EBA published final reports on the draft RTS and draft ITS relating to the revised operational risk framework under the CRR as amended by the CRR3. The draft RTS and ITS will be submitted to the European Commission for adoption.
The final report on business indicator-related mandates for operational risk sets out draft RTS and ITS relating to the business indicator (BI).
- The draft RTS specify (i) the components and exclusions of the business indicator (BI) under Article 314(9) CRR which now forms the sole basis for calculating operational risk capital requirements; and (ii) adjustments to the BI in the context of mergers, acquisitions and disposals under Article 315(3) CRR; and
- The draft ITS map BI components to FINREP reporting cells under Article 314(10) CRR.
The final report on the draft ITS on supervisory reporting introduces targeted amendments to Commission Implementing Regulation (EU) 2024/3117 under Article 430(7) CRR, concerning the operational risk reporting framework. The amendments are intended to enhance existing reporting requirements by requiring additional data on the calculation of BI components, thereby supporting supervisory assessments of institutions' compliance with operational risk own funds requirements.
The draft ITS are accompanied by annexes including templates and instructions. Following the submission of the final draft ITS to the EC, the EBA will develop and publish the draft data point model, XBRL taxonomy and validation rules in Q3, with the final technical package expected in Q4. The first reporting reference date under the new framework is March 2026.
Date of publication: 16/06/2025
Status: Adopted by the EC
The EC adopted a Delegated Regulation amending Regulation 575/2013 (CRR) regarding the date of the application of market risk prudential requirements. The new market risk requirements were introduced by CRR amendments made by Regulation (EU) 2024/1623, which marked the completion of the second phase of the implementation of the Fundamental Review of the Trading Book (FRTB), part of the Basel 3 international standards. The application date has already been postponed a year to 1 January 2026. However, a further postponement – which would delay application until 1 January 2027 – is being proposed to reflect concerns around delays in Basel 3 implementation by other jurisdictions, and the potential impact on EU banks.
The Delegated Regulation will be scrutinised by the EP and Council for three months (and this period may be extended by a further three months).
Date of publication: 12/06/2025
EBA: Two opinions on measures to address macroprudential risk following notifications by the Swedish FSA
Status: Final
The EBA published two opinions on measures to address macroprudential risk following notifications by the Swedish FSA. The first opinion concerns the extension of a measure originally introduced by the Swedish FSA in 2023 for a period of application of two years under Article 458(9) CRR. The measure to be extended applies to all credit institutions using the Internal Ratings Based (IRB) approach to calculate regulatory capital requirements. The measure sets an exposure-weighted average risk weight floor of 35% for certain corporate exposures secured by commercial properties, and a risk weight floor of 25% for certain corporate exposures secured by residential properties. The second opinion concerns the two-year extension of a measure introduced by the Swedish FSA in 2018 and already extended previously making use of Article 458(2)(d)(iv)2 CRR.
- Opinion on measures in accordance with Article 458 CRR regarding certain corporate exposures secured by immovable property in Sweden
- Opinion on measures in accordance with Article 458 CRR regarding mortgage exposures in Sweden
Date of publication: 04/06/2025
(iii) International
BCBS: Draft technical amendment on finalising various technical amendments and FAQs
Status: Consultation
Deadline for the submission of comments: 25/07/2025
BCBS published a draft technical amendment, with a request for comments, on finalising various technical amendments and FAQs with regard to the Basel framework. The amendments relate to: (i) the standardised approach to operational risk; and (ii) the standardised approach to credit risk.
Date of publication: 10/06/2025
c) Securitisation
(i) EU
EC: Proposal for a securitisation package in bid to revive EU market
Status: Consultation
Deadline for the submission of comments: 05/07/2025
The EC published a Securitisation package which aims to strengthen and simplify the EU securitisation framework by removing some of its overly burdensome requirements. It is the first legislative initiative proposed under the Savings and Investments Union Strategy. The package consists of a proposal to amend the EU Securitisation Regulation (Regulation (EU) 2017/2402), a proposal to amend the CRR as regards exposures to securitisations, and a consultation on measures to amend the Liquidity Coverage Ratio Delegated Regulation (Commission Delegated Regulation (EU) 2015/61).
The proposal to amend the Securitisation Regulation seeks to simplify the existing due diligence rules with the aim of reducing duplicative and time-consuming requirements for investors. Verification of information will no longer be required regarding EU-based selling parties, and low-risk investments guaranteed by multilateral development banks will be exempt from due diligence. The EC also makes recommendations for the reporting templates to be revised, which the European Banking Authority will consider when it reviews those templates. In addition, the EC is proposing to amend the homogeneity requirement, specifying that it will be fulfilled where at least 70% of the underlying pool of exposures consists of SME loans, replacing the current 100% for pools made up of exposures from different jurisdictions.
The proposal to amend the CRR as regards exposures of banks to securitisations includes a plan to reduce the capital requirements where a bank's exposure is deemed less risky, including where a bank acts as the issuer of the securitisation. In addition, the significant risk transfer framework, which sets the criteria for supervisors to assess whether an originator bank qualifies for capital relief by transferring a sufficient amount of risk to third parties, is being changed to be clearer and less prescriptive.
The Liquidity Coverage Ratio (LCR) Delegated Regulation sets out the amount and characteristics of liquid assets for EU banks to meet their short-term liquidity requirements and recognises securitisations as eligible assets for the liquidity buffer. The EC is consulting on extending the eligibility of securitisation for inclusion in these buffers. The EC does not propose to adopt the amendments until the revisions to the Securitisation Regulation and CRR have been agreed by the European Parliament and the Council of the European Union and intends for the changes to take effect at the same time.
Date of publication: 17/06/2025
d) Liquidity
(i) EU
Regulation (EU) 2025/1215 amending the CRR as regards requirements for SFTs under the NSFR Status:
Published in the OJ
Date of entry into force: 26/06/2025
Regulation (EU) 2025/1215 amending the CRR in relation to the stable funding factors for securities financing transactions (SFTs) and unsecured transactions with a residual maturity of less than six months, was published in the OJ. The factors are used to apply the net stable funding requirements under the CRR and, by virtue of Article 510(8) of CRR, were due to be increased unless otherwise specified in a legislative act adopted on the basis of an EC proposal. However, the current position is instead being maintained to ensure the ongoing efficient functioning of SFTs and collateral markets and to avoid an undue increase in funding costs for credit institutions.
Under the revised framework, the EBA will assess and report on the impact of these changes every five years.
Date of publication: 25/06/2025
e) Risk management/SREP/Pillar 2/Outsourcing/NPL
(i) EU
Published in the OJ
Date of application: 17/07/2025
Commission Delegated Regulation (EU) 2025/1275, correcting certain language versions of Delegated Regulation (EU) 2024/857 supplementing CRD IV with regard to RTS specifying a standardised methodology and a simplified standardised methodology to evaluate the risks arising from potential changes in interest rates that affect both the economic value of equity (EVE) and the net interest income (NII) of an institution's non-trading book activities, has been published in the OJ.
The initial Delegated Regulation has applied since 14 May 2024. It set out that, having regard to the fact that both the EVE and the NII estimations can be based on repricing cash flows, both approaches have been broadly based on the same rules regarding slotting in time buckets. In the simplified standardised methodology, adaptations include: (i) a prescriptive, linear slotting of non-maturity deposit cash flows applying scenario-dependent scalars to the core component; (ii) a simplified calculation of automatic optionality based on pay-outs; and (iii) for the purpose of NII, a calculation of interest rates based on an average reference term per product type, an average commercial margin per product type, and an interest rate up to the repricing date of the instruments calculated with estimates of average interest rates.
Date of publication: 27/06/2025
f) Cyber security
(i) EU
Council of the EU: Adoption of EU Blueprint on cybersecurity crisis management
Status: Adopted by the Council of the EU
The Council of the EU adopted the EU Blueprint on cybersecurity crisis management, which gives guidance for the EU's response to large-scale cybersecurity incidents or cyber crises. It displays an important Guideline for member states to enhance their preparedness, detection capabilities and response to cyber security incidents, while building on the foundations laid by the 2017 Cybersecurity Blueprint and taking on board important recently adopted legislation such as the NIS2 directive and the Cyber Solidarity Act. The EU Cyber Blueprint aims to tackle an increasingly complex cyber threat landscape by strengthening existing EU networks, fostering cooperation between member states and actors involved, and overcoming hurdles that may exist.
Date of publication: 06/06/2025
g) Qualifying holdings
(i) EU
EBA: Consultation on draft RTS on proposed acquisitions of credit institutions
Status: Consultation
Deadline for the submission of comments: 18/09/2025
The EBA published a consultation paper and accompanying press release, on the draft RTS under the CRD IV. The draft RTS specify the minimum information that must be provided to competent authorities when notifying them about proposed acquisitions of qualifying holdings in credit institutions. The aim is to standardise the notification process across the EU, ensuring a consistent application against the five assessment criteria set out under the CRD. In line with these criteria, the draft RTS outlines a request for information that includes: (i) the proposed acquirer's (legal or natural) identity, reputation, financial soundness and financial/non-financial interests in the target institution; (ii) the reputation, knowledge, skills and experience of proposed management body members; (iii) the acquirer's plans for sound and prudent management, including strategy, prudential ratio estimates and new group structure; and (iv) legitimate sources of acquisition funding, including borrowed funds, asset sales and fund transfer channels, to assess suspicion of money laundering or terrorist financing risk. The draft RTS incorporate the principle of proportionality, requiring only information commensurate with the size of the holding and the acquirer's influence. It also avoids duplication by exempting submissions of data already held by competent authorities, including within the Banking Union.
Date of publication: 18/06/2025
h) Supervisory reporting
(i) EU
EBA/ECB: Advice on the implementation of the revised statistical classification of economic activities
Status: Final
The EBA, in collaboration with the ECB, announced that it welcomes the advice of the Joint Bank Reporting Committee (JBRC) to implement the revised statistical classification of economic activities, NACE Rev. 2.1, in a harmonised manner across its reporting frameworks. It sets out that this harmonisation is essential to reduce costs for banks and to enhance the analytical quality of reported data.
Date of publication: 30/06/2025
i) Accounting/Prudential filter/Audit
(i) EU
EC: Commission Regulation (EU) …/… amending Regulation (EU) 2023/1803 as regards IFRS 9 and IFRS 7
Status: Adopted by the EC
The EC adopted a Commission Regulation amending Regulation (EU) 2023/1803 as regards International Financial Reporting Standard (IFRS) 9 and IFRS 7.
Date of publication: 30/06/2025
(ii) International
FSB: Biannual Roundtable on External Audit
Status: Final
The FSB announced that it held the 2025 Roundtable on External Audit on 2-3 June in Basel. This biennial gathering aims to promote financial stability by enhancing public confidence in the quality of external audits. The discussions centred on the increase in inspection findings since 2022, lessons learned from the banking turmoil in 2023, and strategies to enhance audit quality in light of those developments. Participants exchanged views on the opportunities and risks associated with new technologies, including artificial intelligence, in external audits, as well as the implications of opening audit firms' capital to private equity investors. The discussion also covered sustainability reporting and related challenges for all assurance practitioners, and the progress achieved in developing sustainability assurance and ethics standards. Participants also discussed recent accounting developments and related audit challenges, such as the implementation of the IASB's standard IFRS 17 Insurance Contracts, banks' provisioning for expected credit losses, as well as new proposals for banks' hedge accounting.
Date of publication: 03/06/2025
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