The European Banking Authority (EBA) published the second part of its advice on the implementation of Basel III in the EU, which complements the Report published on 5 August 2019. Today’s publication includes an assessment of the impact of the revisions to the credit valuation adjustment (CVA) and market risk frameworks, and the corresponding policy recommendations. It also provides a macroeconomic impact assessment of the full Basel III package. When accounting for the 2019 FRTB standards, the impact assessment shows that the full implementation of Basel III, under conservative assumptions, will increase the current minimum capital requirement (MRC) by 23.6% on average. This impact is lower than the 24.4% originally estimated in the August 2019 report, and would imply an aggregate shortfall in total capital of EUR 124.8 billion. The macroeconomic impact assessment shows that the implementation of Basel III will have net benefits for the economy of the European Union. The EBA reaffirms its support for a full implementation of the final Basel III standards in the EU.
EU ambassadors today approved the Council’s position on a proposal for a common framework and minimum requirements for out-of-court mechanism to recover the value from loans guaranteed with collateral in case the borrower is not able to pay it back. Effective out-of-court enforcement can help prevent the accumulation of non-performing loans (NPLs), as it provides banks with legal instruments to recover collateral more quickly. Negotiations with the European Parliament can proceed as soon as the Parliament has agreed its stance.
The European Banking Authority (EBA) published today a set of roadmaps outlining its approach and timelines for delivering the mandates stemming from the Risk Reduction Measures Package adopted by the Council of the EU and the European Parliament on 20 May 2019. These mandates are mainly focused in the areas of governance and remuneration, large exposures, resolution as well as reporting and disclosure. Besides clarifying the sequencing of mandates and the rationale behind their prioritisation, the roadmaps aim at providing a preliminary understanding of the mandates combined with some policy guidance. Through this work, the EBA will contribute to making the European Single Rulebook more comprehensive, proportionate and apt to reflect developments in the banking sector.
Today, the European Insurance and Occupational Pensions Authority (EIOPA) published technical information on the relevant risk free interest rate term structures (RFR) with reference to the end of October 2019.
The private sector working group on euro risk-free rates has published a report with recommendations, from an accounting perspective, on the transition to new risk-free rates. The report focuses on the implications for International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) as the most widely used reporting frameworks in Europe.
The European Banking Authority (EBA) published today two reports, which monitor the impact of implementing the final Basel III reforms and the current implementation of liquidity measures in the EU. The EBA Basel III capital monitoring report is the latest in a regular exercise using the methodology of the Basel Committee of Banking Supervision and is not comparable to the broader Call for Advice report published in July 2019. The present report includes an assessment of the impact of the full implementation (to 2027) of the Basel III package on EU banks based on data as of 30 June 2018. The report on liquidity measures evaluates the liquidity coverage requirements currently in place in the EU. Overall, the EBA estimates that the Basel III reforms, once fully implemented, would determine an average increase by 19.3% of EU banks’ Tier 1 minimum required capital. The liquidity coverage ratio (LCR), which was fully implemented in January 2018, stood at around 149% on average in June 2018, well above the minimum threshold of 100%.
The European Commission Directorate-General for International Cooperation and Development (DEVCO) is organising DEVCO Environment and Climate Week 2020to bring together colleagues from EU Delegations, headquarters and specialised organisations to discuss the latest environmental and policy developments and to explore how to strengthen the environmental and climate dimension of EU cooperation. In the course of thematic sessions featuring high-level speakers, training sessions and networking events, participants will have the opportunity to strengthen their capacity to promote environmental sustainability and climate resilience through policy dialogue, programming and investments.
The European Banking Authority (EBA) announced today its intention to provide clarity on the appropriate treatment of the so-called ‘legacy instruments’ at the end of 2021, when the benefits of the grandfathering period will expire. The aim of the clarification is to preserve a consistent and high quality capital base for EU institutions under the CRR.