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1. Bank regulation
1.1 PRUDENTIAL REGULATION
a) General
(i) EU
Status: Final
The ESRB published a report on financial stability risks from linkages between banks and the non-bank financial intermediation (NBFI) sector. The report focuses on bank funding from NBFI entities and credit exposure to NBFI entities as well as banks' derivatives exposures to NBFI entities. It finds linkages between banks and the NBFI sector to be significant, and while they do not currently pose acute risks to financial stability, they create important vulnerabilities that could amplify stress in adverse market conditions. Furthermore, these vulnerabilities are highly concentrated in a small number of large euro area global systemically important banks (G-SIBs). Risk-bearing capacity among euro area G-SIBs is key to absorbing shocks in the financial system and preventing the amplification of financial stress.
Date of publication: 12/02/2026
(ii) International
BCBS: Discussion of recent market developments
Status: Final
The BCBS issued a press release following its virtual meeting on 24–25 February, at which it discussed recent market developments and the global banking outlook. With respect to vulnerabilities in government bond-backed repo markets, the BCBS notes that the implementation of its finalised counterparty credit risk management Guidelines, particularly in relation to securities financing transactions and collateral management, should help mitigate these risks but it will monitor implementation progress. Regarding the expedited targeted review of the prudential standards for banks' cryptoasset exposures, an update on progress will be provided later in the year. The BCBS has approved a technical amendment to the standardised approach to operational risk, following its previous consultation, and a response to a frequently asked question on the market risk framework. Both will be published in March.
Date of publication: 25/02/2026
BCBS: Report on synthetic risk transfers
Status: Final
The BCBS published a report on synthetic risk transfer (SRT) transactions. The report is part of the continued monitoring and investigation of the interconnections between banks and non-bank financial intermediaries (NBFIs). The report finds SRT markets have grown rapidly over the last decade, and SRT investors constitute an important source of capital relief for corporate credit risk. Assets protected by SRTs as a percentage of consolidated total assets of banks in individual jurisdictions range between 0.9% and 1.8%, with an average of about 1.1%.
Date of publication: 17/02/2026
b) Solvency/Own funds issues
(i) EU
Status: Final
The EBA published an opinion and related letter regarding the European Commission's (EC) proposed amendments to the final draft regulatory technical standards (RTS). These RTS specify what constitutes an equivalent legal mechanism to ensure that a residential property under construction is completed within a reasonable timeframe, for the purposes of risk-weighting requirements under the Capital Requirements Regulation (CRR). The EBA is resisting the EC's proposal to increase the cap on the risk weight applicable to the protection provider from 20% to 30% under the standardised approach, arguing the 20% threshold represents a core prudential safeguard. It also recommends reinstating the requirement that the completion guarantee be required by the law of the Member State where the residential property is being built. In addition, the opinion provides targeted comments on certain drafting changes introduced by the EC, including the treatment of intragroup arrangements and specific provisions relating to enforceability and force majeure. A revised version of the draft RTS reflecting the EBA's recommended drafting adjustments is set out in Annex I to the opinion. The EBA notes that it remains committed to working constructively with the EC to ensure the timely adoption of a robust and legally sound framework.
Date of publication: 26/02/2026
EBA: Conclusion of work on legacy instruments monitoring
Status: Final
The EBA announced that given the extensive work already carried out, it will not prioritise the monitoring of legacy instruments, while maintaining its review of the quality of own funds and eligible liabilities. The EBA is confident that competent authorities will continue to monitor the remaining limited and specific cases on the basis of the guidance provided, including in its opinion on the prudential treatment of legacy instruments and its opinion on legacy instruments: outcome of its implementation.
Date of publication: 25/02/2026
ECB: Opinion comprising proposals for two Regulations and a Delegated Regulation regarding securitisation
Status: Draft
The ECB published an opinion on the following three proposals: (i) a proposal for a Regulation amending Regulation (EU) 2017/2402 laying down a general framework for securitisation and creating a specific framework for STS securitisation; (ii) a proposal for a Regulation amending the CRR on prudential requirements for credit institutions as regards requirements for securitisation exposures; and (iii) a draft proposal for a Delegated Regulation amending Delegated Regulation (EU) 2015/61 as regards the eligibility conditions for securitisations in the liquidity buffer of credit institutions.
Date of publication: 23/01/2026
Status: Published in the OJ
Date of entry into force: 10/03/2026
The Commission Delegated Regulation amending Delegated Regulation (EU) 2015/35 as regards technical provisions, long-term guarantee measures, own funds, equity risk, spread risk on securitisation positions, other standard formula capital requirements, reporting and disclosure, proportionality and group solvency was published in the OJ.
Date of publication: 18/02/2026
EBA: Final report on Guidelines on proportionate retail diversification methods under Article 123(1) CRR
Status: Final
The EBA published final Guidelines on proportionate retail diversification methods under Article 123(1) CRR. The Guidelines seek to establish a harmonised and more proportionate framework for assessing whether retail portfolios qualify for the preferential 75% risk weight for retail exposures under the standardised approach for credit risk. Under Basel III, a baseline granularity benchmark of 0.2% applies, meaning that retail portfolios are sufficiently granular if no aggregate exposure to a single counterparty or group of connected clients exceeds 0.2% of the overall retail portfolio.
The 2024 consultation presented two alternatives for assessing diversification, and the final Guidelines confirm the adoption of the "one-step" approach, on the grounds that it is more proportionate and less burdensome than the iterative method that was also proposed. The consultation originally proposed a diversification threshold of 5%, which has been raised to 10%. This means that institutions may exceed the baseline provided that no more than 10% of the eligible retail portfolio exceeds the 0.2% benchmark. The EBA confirmed that it increased the threshold in its final Guidelines to ease the impact on small and medium-sized institutions.
The Guidelines also clarify the treatment of securitised retail exposures, distinguishing between diversification assessments applicable when institutions act as originators and when they act as investors. A limited, temporary derogation for investor institutions is also introduced where obligor-level information is unavailable under the applicable transparency templates.
Date of publication: 13/02/2026
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