EBA updates methodology for assessing third country equivalence of regulatory and supervisory frameworks

21 February 2022

The European Banking Authority (EBA) published today its updated questionnaires used for the assessment of regulatory and supervisory frameworks of third countries, to reflect certain provisions recently introduced by the revised prudential regulation in the EU.

The Capital Requirements Regulation (CRR) foresees that certain exposures to entities located in non-EU countries can be treated, in terms of risk-weights, as exposures in EU Member States, provided that the European Commission adopts an Implementing Decision determining that the country’s prudential requirements are equivalent to the EU ones.

In the past years, the EBA has been assisting the European Commission in preparing their decisions on the equivalence of prudential regimes applicable in third country jurisdictions. Specifically, upon request by European Commission, the EBA assesses the supervisory and regulatory requirements of third country jurisdictions. The methodology used for this type of assessment is based on two questionnaires, which are also published on the EBA website:

  • a 1st step questionnaire, which provides an initial screening, focusing on the most relevant requirements and principles and identifying similar laws in place;
  • a 2nd step questionnaire, which allows for a granular and more detailed investigation of third country frameworks by identifying and mapping similar rules and provisions to the CRR and analysing the divergences.

Following the entry into force in June 2021 of the most recent updates of the CRD V and of the Capital Requirement Regulation (CRR2), the EBA has updated the questionnaires to reflect the provisions introduced by the new EU framework. The updated questionnaires will replace the old ones and will be used to conduct future assessments of the regulatory and supervisory framework of third countries.

Legal Basis and background

Article 33(2) provides that the EBA shall assist the European Commission in preparing equivalence decisions pertaining to regulatory and supervisory regimes in third countries following a specific request for advice from the Commission or where required to do so by the legislative acts referred to in Article 1(2) of Regulation (EU) 2010/1093.

Press contacts

Franca Rosa Congiu

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