EBA acknowledges Commission’s decision on equivalence for Bosnia and Herzegovina and North Macedonia

The European Banking Authority (EBA) acknowledged today the EU Commission’s decision to consider the supervisory and regulatory framework applicable to credit institutions in Bosnia and Herzegovina and North Macedonia as equivalent to that applied in the Union. The EU Commission’s decision considered the EBA’s assessments carried out in 2019-20 and the respective Opinions, concluding that the supervisory and regulatory framework applicable to credit institutions in Bosnia and Herzegovina and North Macedonia could be regarded as equivalent to that applied in the Union.

According to the Capital Requirements Regulation (CRR), under well-defined conditions, certain categories of exposures to entities located in countries outside the EU can benefit from the same preferential treatment applied to EU Member States' exposures in terms of capital requirements. This would imply that EU credit institutions can apply preferential risk weights to relevant exposures to entities located in those countries. In particular, such preferential treatment is only available if and when the European Commission adopts an Implementing Decision determining that the country's prudential supervisory and regulatory requirements are at least equivalent to those applied in the EU.

Against this background, and in accordance with Article 33 of Regulation 1093/2010, the EBA was asked by the European Commission to provide technical advice on the equivalence of the regulatory and supervisory regimes in countries outside the EU.

Following this assessment, the EBA provided its Opinion to the EU Commission in May and November 2020 respectively, that the supervisory and regulatory framework applicable to credit institutions (as documented in domestic laws and regulations) in Bosnia and Herzegovina and North Macedonia could be regarded as equivalent to those applied in the Union.

As requested by the Commission, the EBA published today this Opinions after the Commission's approval and publication of the related Implementing Decision on equivalence.