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img_publication Watch

Financial Regulation: Weekly Update. 22 December 2017

By , ,

Highlights: ECB published its 2018 supervisory priorities, and issued a consultation on the assessment of internal models for counterparty risks. EBA issued consultations on internal models benchmarking, published impact assessments for LCR and the full Basel reform, and updated the quantitative analysis for MREL. Finally, SRB published its 2017 MREL policy statement.


GLOBAL

 

  • BCBS consults on proposed amendments to the NSFR

It is related to the treatment of extraordinary monetary policy operations in the NSFR (reduced requirements for certain central bank claims). Deadline: 5 Feb.

  • BCBS consults on stress testing principles, and a range of practices report

i) To replace the existing principles of 2009. Deadline: 23 March, and ii) compares supervisory and bank’s internal stress testing practices identifying areas for progress.

  • FSB issues consultation regarding resolution regimes in insurance

It presents the methodology to assess the implementation of the “Key Attributes of Effective Resolution Regimes for Financial Institutions” in the insurance sector. Deadline: 28 Feb.

 

EUROPE

 

  • ECB publishes supervisory priorities for 2018 and SREP methodology booklet

i) Main priorities are: business model and profitability drivers, credit risk, risk management and activities comprising multiple risk dimensions. ii) The 2017 edition, to be applied in 2018. It presents the main outcomes from the third SREP cycle.

  • EBA consults on internal models’ benchmarking and FRTB and SA-CCR’s implementation

i) Aimed at adjusting benchmarking portfolios and reporting requirements for EBA’s benchmarking exercise in 2019. Deadline: 31 Jan ii) Discussion paper on technical and operational challenges for the implementation of the new standards. Deadline: 15 Mar.

  • ECB asks for feedback on assessment of internal models for counterparty credit risk

Draft guidelines on assessment methodology for the internal model method and the advanced CVA capital charge. Deadline 31 Mar.

  • EBA publishes LCR impact assessment report and full impact assessment of Basel III

i) Fourth impact assessment report shows EU banks’ average LCR well above 100% minimum requirement and concludes it has helped banks support lending to the real economy. ii) Follow up on Basel III cumulative assessment report that provides more granular information.

  • EBA issues RTS for simplified obligations on resolution plans and updates MREL analysis

i) It specifies the eligibility criteria determining whether a financial institution can be subject to a simplified obligation regarding resolution plans. ii) The updated MREL quantitative analysis shows a modest improvement in the stack of MREL instruments in 2016.

  • SRB publishes its 2017 policy statement on MREL

It serves as a basis for setting consolidated MREL targets for banks within the scope of the SRB.

  • EC issues proposals to modify prudential framework for investment firms

Proposal of regulation and directive to amend current rules (in CRD IV / CRR and MiFID II / MiFIR). They seek to include proportionate and risk-sensitive rules for investment firms.

  • ESAs publish RTS on margin requirements for non-centrally cleared OTC derivatives

Joint RTS amending EMIR regarding physically settled FX forwards. The amendments seek to bring alignment with the supervisory guidance applicable in other important jurisdictions.

  • ESMA consults on draft technical standards implementing the Securitisation Regulation

Papers: establishes a general framework for securitisation and creates a specific framework for simple, transparent and standardised (STS) securitisation. Deadline: 19 Mar.

  • EBA publishes opinion on the transition from PSD1 to PSD2

Addressed to competent authorities, it clarifies challenges identified for the transition, including the transitional period foreseen under PSD2.

  • ESMA publishes final draft RTS regarding ESEF

The RTS sets out the new European Single Electronic Format (ESEF) to be used by all issuers to prepare annual reports from 2020.

  • EC consults on inception impact assessment from measures to support SME listing

It presents the assessment of measures to revive SME’s initial public offerings and bond listings by alleviating burdens or removing regulatory obstacles. Deadline: 15 Jan.

  • ESMA updates Q&As on MiFID II and MiFIR and publishes translations for MiFID II guides

i) Q&As on MiFID II transparency and market structure, ii) Q&As on MiFID II/ MiFIR investor protection, iii) Q&A on MiFIR data reporting, and iv) official translations for MiFID II guides on management body of market operators and data reporting services providers.

  • EIOPA updates data, issues supervisory statement, two reports, Q&A and an opinion

i) Updates portfolio to calculate volatility adjustments to risk-free interest rate term structures. ii) Supervisory statement based on the analysis of solvency and financial conditions report. iii) Report on the use of long-term guarantees, and exemptions from regular supervisory reporting. iv) Q&A on key information documents for insurance products. v) Opinion on supervisory assessment of internal models.

SPAIN

 

  • BdE maintains its countercyclical buffer for 1Q2018

It has decided to keep at 0% the value of the countercyclical capital buffer for credit exposures in Spain of credit institutions.

  • CNMV approves circular on website disclosure obligations of investment firms

It sets the content to include in “Corporate governance and remuneration policy” sections. Investment firms have 3 months to comply with the requirements.

UNITED KINGDOM

  • PRA consults on the authorisation approach to international banks and insurers

It seeks views on the proposed approach to authorising and supervising third-country banks and insurers (with a focus on wholesale banks using branches). Both deadlines: 27 Feb.

 

UNITED STATES

 

  • FDIC and FRB announce “living wills” of US GSIBs do not have deficiencies

Resolution plans of the eight largest and most complex banking organizations do not have deficiencies. But, four firms have shortcomings that require additional work in the next plan.

  • FRB repeals Home Mortgage Disclosure and revises Consumer Leasing regulation

Repeal of Home Mortgage Disclosure (Regulation C) which has been superseded by final rules issued by the CFPB. Also proposes to revise Consumer Leasing (Regulation M).

  • Agencies release annual Community Reinvestment Act asset-size threshold adjustment

Adjustment to thresholds used to define small banks, small saving associations, intermediate small banks and intermediate small savings associations.

  • Agencies announce Shared National Credit definition change

The aggregate loan commitment threshold to be included in the SNC program increases to $100 million, in order to adjust for inflation and changes in the average loan size.

 

 

Recent publications of interest (in English and Spanish):

 

 

Previous editions of our Weekly Regulatory Update in Spanish and English.

 

 

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