EBA calls for caution amid rising geopolitical risks for the EU/EEA banking sector

The European Banking Authority (EBA) today published the spring edition of its risk assessment report (RAR). The report covers the EBA’s common risk assessment as well as the analysis of banks’ asset encumbrance and funding plan data, which had previously been published in two separate reports. It also includes specific chapters dedicated to EU/EEA banks’ Commercial Real Estate (CRE) exposures and EU/EEA banks’ interconnections with non-bank financial intermediaries (NBFIs).

Most EU resolution banks comply with the requirement aimed at supporting orderly resolution in case of failure, the EBA dashboard finds

The European Banking Authority (EBA) today published its Q4 2023 quarterly dashboard on minimum requirement for own funds and eligible liabilities (MREL), which discloses aggregated statistical information for 333 EU/EEA banks earmarked for resolution. All banks are meeting their MREL requirements in line with the Bank Recovery and Resolution (BRRD) deadline of 1 January 2024, except for 3 banks that reported technical shortfalls against this deadline. 23 banks have been granted a deadline extension. The amount of instruments coming to maturity over the next year for the sample reached EUR 207bn.

EBA and ESMA publish guidelines on suitability of management body members and shareholders for entities under MiCAR

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) today published joint guidelines on the suitability of members of the management body, and on the assessment of shareholders and members with qualifying holdings for issuers of asset reference tokens (ARTs) and crypto-asset service providers (CASPs), under the Markets in Crypto Assets regulation (MiCAR).

The EBA finds Italian waiver for STS on-balance-sheet securitisation justified

The European Banking Authority (EBA) today published an Opinion addressed to Consob, the Italian Securities Commission, in response to the Competent Authority’s notification of its decision to grant the permission referred to in Article 26e(10) of the Securitisation Regulation, which specifies the eligibility criteria for high-quality collateral for on-balance-sheet securitisations to qualify as Simple, Transparent, and Standardised (STS).

The EBA updates monitoring of Additional Tier 1, Tier 2 and TLAC/MREL eligible liabilities instruments of European Union institutions

The European Banking Authority (EBA) today published an updated Report on the monitoring of Additional Tier 1 (AT1), Tier 2 and total loss absorbing capacity (TLAC) as well as the minimum requirement for own funds and eligible liabilities (MREL) instruments of European Union (EU) institutions. Today’s update provides new guidance on the prudential valuation of non-CET1 instruments and on other aspects related to the terms and conditions of the issuances.

The EBA welcomes the entry into force of the framework establishing the anti-money laundering and countering the financing of terrorism authority

The European Banking Authority (EBA) welcomes the entry into force of the new EU framework that will transform how Europe tackles money laundering and terrorist financing. The EBA is proud to be paving the way for the establishment of the new anti-money laundering and countering the financing of terrorism authority (AMLA) and is committed to facilitating a smooth transition, and making the EU a hostile place for financial crime.

The EBA updates the Pillar 3 disclosure framework finalising the implementation of the Basel III Pillar 3 framework

The European Banking Authority (EBA) published today a final draft implementing technical standards (ITS) on public disclosures by institutions that implement the changes in the Pillar 3 disclosure framework introduced by the amending Regulation (EU) 2024/1623 (CRR 3). These ITS will ensure that market participants have sufficient comparable information to assess the risk profiles of institutions and understand compliance with CRR 3 requirements, further promoting market discipline.

The EBA publishes final standards for assessing the materiality of extensions and changes to new market risk internal models

The European Banking Authority (EBA) today published its final draft Regulatory Technical Standards (RTS) on the conditions for assessing the materiality of model extensions and changes, as well as changes to the subset of modellable risk factors, applicable under the Fundamental Review of the Trading Book (FRTB) rules. With the submission of these final draft RTS to the European Commission, the EBA completes its roadmap on market and counterparty credit risk approaches published on 27 June 2019.

Profitability of EU banks remains resilient although the sector is confronted with materialising credit risks

The European Banking Authority (EBA) today published its Q1 2024 quarterly Risk Dashboard (RDB), which discloses aggregated statistical information for the largest EU/EEA institutions together with the Risk Assessment Questionnaire (RAQ) a bi-annual qualitative survey with banks’ expectations for future trends and developments. EU/EEA’s banks continue to benefit from wide interest margins improving further their profitability and capital position. However, credit risks have started materialising with an increase in non-performing loans during the first quarter. The majority of banks surveyed expect further asset quality deterioration in CRE, SMEs loans and consumer credit in the next 6-12 months.

ESAs propose improvements to the sustainable finance disclosure regulation

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) today published a joint Opinion on the assessment of the Sustainable Finance Disclosure Regulation (SFDR). The ESAs call for a coherent sustainable finance framework that caters for both the green transition and enhanced consumer protection, taking into account the lessons learned from the functioning of the SFDR.

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