Author: Selwyn Manning

Source: European Banking Authority

The Banking Stakeholder Group (BSG) of the European Banking Authority (EBA) elected Christian Stiefmueller as new Chair during its meeting on 15 October 2024. Mr Stiefmueller, who represents consumers, will be supported by two Vice-Chairs, Julia Strau, and Edgar Loew, representing the financial institutions, and the independent top-ranking academics, respectively. Their mandates run for two years.

Legal basis and background

The BSG is set up according to Article 37 of the EBA Founding Regulation, to help facilitate dialogue and consultation with stakeholders on the work of the EBA.

The BSG is composed of 30 members who serve for a period of four years with the possibility to be renewed for an additional term.

Source: European Banking Authority

The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today issued an Opinion on the European Commission’s (EC) rejection of the draft Implementing Technical Standards (ITS) on the registers of information under the Digital Operational Resilience Act (DORA). The ESAs raise concerns over the impacts and practicalities of the proposed EC changes to the draft ITS on the registers of information in relation to financial entities’ contractual arrangements with ICT third-party service providers.   

Background and legal basis

Source: Government of the Netherlands

News item | 15-10-2024 | 10:27

The Netherlands is very proud to participate in the Expo 2025 Osaka Kansai Japan, to be held from 13 April to 13 October 2025. With its participation theme “Common Ground,” The Netherlands aims to showcase Dutch innovative solutions in areas such as the energy transition. During Expo 2025, the pavilion intends to provide “Common Ground”: a meeting place for businesses, knowledge institutions, governments and (cultural) organizations to bring together different perspectives and expertise in order to find collective solutions to global challenges.

Marc Kuipers, Commissioner General for the Netherlands at Expo 2025 Osaka

“I am delighted to announce our partners, including two Gold Sponsors, for the Osaka-Kansai Expo 2025. These partnerships represent a crucial step in deepening business and cultural ties between the Netherlands and Japan,” says Mr. Kuipers, “Together with AkzoNobel, Randstad, and Philips, we are excited to work under the theme of ‘Common Ground’, advancing our shared vision and collaboration towards a sustainable future.”

Kaj van Alem, President of AkzoNobel Japan and Global Director for AkzoNobel’s Wood Coatings business

“AkzoNobel is excited to be involved in this incredible initiative at the Osaka World Expo as part of our commitment to a better future. The event will be a tremendous global stage that represents a perfect opportunity for AkzoNobel in Japan, to showcase its extensive portfolio of sustainability-driven innovative solutions.”

Kajetan Slonina, Chairman and CEO, Randstad K.K. / Chief Executive, APAC, Randstad Jos Schut, CHRO, Randstad K.K.& APAC, Randstad

“We are pleased for Randstad to be able to participate in the EXPO 2025 Netherlands Pavilion as a supporting company. Randstad originated in the Netherlands, the country which influenced the way we work. At Randstad we aim to be the world’s most equitable and specialized talent company. We are committed to actively contributing to the creation of a sustainable and better future. We contribute to global society’s needs by promoting fair labor markets, realizing fairness in the workplace, and through the green transition. The Common Ground concept advocated by the Netherlands Pavilion is a vision and a shared mission. We are aligned with this vision, aiming to create a society where everyone can find meaningful and rewarding work, develop the skills they need, and work with vitality as their true selves. We eagerly anticipate the opportunity to meet you on Common Ground and embark on this journey together.”

Sponsorships

The Netherlands Pavilion is still accepting applications from companies and organizations interested in becoming sponsors, as well as organizing events in the event space within the pavilion.

Event space at the Netherlands pavilion available for rent

The event space within the Netherlands Pavilion will be available for external organizations to rent during the Expo.

Details regarding the sponsor packages and event space rental can be found here: https://nlexpo2025.nl/en/organize-event

For more information of the Netherlands participation and the Road2Osaka at Expo 2025 Osaka, Kansai, visit www.nlexpo2025.nl | www.orandaexpo2025.nl

Source: European Banking Authority

• The consultation paper defines the IT solutions and processes that large and other institutions shall follow to publish Pillar 3 information centrally in the EBA data hub.
• The proposed IT solutions leverage the EBA’s past and ongoing work and infrastructures  in the area of disclosures and reporting.
• The Pillar 3 data hub will centralise on the EBA website the Pillar 3 disclosures of all EU institutions, thus allowing users to download data and visualize the Pillar 3 information in a standardised format.

The European Banking Authority (EBA) launched today a consultation on the Pillar 3 data hub, which will centralise prudential disclosures by institutions through a single electronic access point on the EBA website. This project is part of the Banking Package laid down in the Capital Requirements Regulation (CRR3) and Capital Requirements Directive (CRD6). This consultation runs until 11 November.

The draft Implementing Technical Standards (ITS) present the IT solutions and processes to be followed by large and other institutions when submitting their respective Pillar 3 disclosures. This includes the IT solutions to be used, the data exchange formats to be considered, the technical validations to be performed by the EBA.

The EBA welcomes feedback both from institutions and users of Pillar 3 information.

The current proposals in the consultation paper consider the feedback received from the industry on the discussion paper published in December 2023. The summary of this feedback and respective EBA analysis is included in the consultation paper.

In parallel, the EBA continues to run a pilot exercise with voluntary institutions to test the process for large and other institutions. Conclusions from the pilot exercise, together with the feedback received during this consultation, will be taken into account when finalising the draft ITS to be submitted to the European Commission for adoption.

Consultation process

Comments to this consultation paper can be sent to the EBA by clicking on the “send your comments” button on the consultation page. Please note that the deadline for the submission of comments is 11 November 2024. All contributions received will be published following the end of the consultation, unless requested otherwise.

A public hearing will be organised in the form of a webinar on 21 October from 15:00 to 16:30 CET. Please register for the hearing here by 17 October 13:00 CET.

Legal basis, backgrounds d next steps

The new Banking Package (CRR3/CRD6), which will implement the latest Basel III reforms in the EU, includes a mandate to the EBA to develop a Pillar 3 data hub. The EBA’s plan on how to implement the mandates included in the banking package is explained in the ‘EBA Roadmap on strengthening the prudential framework’, published in December 2023.

The CRR3 (Articles 434 and 434a) mandates the EBA to publish on its website all the prudential disclosures for all institutions subject to these disclosure requirements, making it readily available in a centralised manner to all the relevant stakeholders through a single electronic access point on its website. To comply with this mandate the EBA is building a data hub putting together all the disclosures required under Part Eight of the CRR.

The CRD6 (Article 106) mandates the EBA to issue guidelines, in accordance with Article 16 of Regulation (EU) No 1093/2010, to specify the requirements set out in paragraph 1 under which Competent Authorities are empowered to require disclosures more frequently than required under CRR3, set deadlines to institutions to submit the information to EBA and require institutions to use specific media and locations for publication, other than the EBA website for centralised disclosures.

The draft ITS for small and non-complex institutions and on the resubmission policy will be consulted separately, at a later stage.

Source: European Banking Authority

The European Banking Authority (EBA) today published its final Guidelines on the orderly redemption of token holders in case of crisis of the issuer. The Guidelines, which are addressed to competent authorities designated under the Markets in Crypto-Assets Regulation (MiCAR), cover issuers of asset-referenced tokens (ARTs) and of e-money tokens (EMTs).

The Guidelines specify the content of the redemption plan to be developed by issuers of ARTs and EMTs in going concern, including the liquidation strategies of the reserve of assets, the mapping of critical activities, the content of the redemption claims, the main steps of the redemption process, and the elements that may lead to the trigger of the plan by the competent authority.

Considering the feedback received during the public consultation, a few targeted amendments have been made to streamline the wording and provide further clarity on some specific aspects. For instance, some clarifications allow for flexibility so that the guidance addressed to issuers of ARTs relating to the liquidation of the reserve of assets can be used, to some extent, also by issuers of EMTs.

Legal basis and next steps

The Guidelines on redemption plans have been developed according to Article 47(5) of MiCAR. By virtue of the cross-reference set out in Article 55 MiCAR, the Guidelines also cover issuers of e-money tokens, as applicable. 

Source: European Banking Authority

The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published today its Work Programme for 2025, placing particular emphasis on ongoing collaboration to tackle cross-sectoral risks, promoting sustainability in the EU financial system and strengthening financial entities’ digital resilience.

More specifically, in addition to fostering regulatory consistency, adequate risk assessment, financial stability as well as the protection of consumers and investors, the ESAs will undertake joint work in 2025 to:

• provide further guidance on sustainability disclosures,
• make progress on financial entities’ digital operational resilience by, among others, launching the oversight of critical information and communication technology (ICT) third-party providers and implementing the major ICT-related incident coordination framework, in accordance with the Digital Operational Resilience Act (DORA),
• monitor financial conglomerates,
• promote coordination and cooperation among national innovation facilitators with a view to facilitating the scaling up of innovative solutions in the financial sector, and
• address other cross-sectoral matters such as retail financial services, investment products and securitization.

Notes

The Joint Committee is a forum with the objective of strengthening cooperation between the three ESAs, where they coordinate their supervisory activities in the scope of their respective responsibilities regularly and closely and ensure consistency in their practices.

In particular, the Joint Committee works in the areas of micro-prudential analyses of cross-sectoral developments, risks and vulnerabilities for financial stability, retail financial services and consumer and investor protection issues and retail investment products, cybersecurity, financial conglomerates, accounting and auditing. More information about the Joint Committee is available here.

Source: European Banking Authority

The European Banking Authority (EBA) today published its third mandatory Basel III monitoring Report which assesses the impact that the EU implementation of the Basel III framework will have on EU banks at the full implementation date, i.e. 2033. The additional impact considers the application of all EU requirements, as reflected in the Capital Requirements Regulation (CRR3), i.e. Pillar 2 requirements, and all EU specific capital buffers. In terms of minimum required capital, the impact has further decreased in relation to the previous reference date of December 2022. The impact is minimal in terms of estimated Tier 1 capital shortfall, while the total capital shortfall is estimated at EUR 5.1 billion.

For the EU banking sector as a whole, the capital that needs to comply with the Basel III reform amounts to EUR 0.9 billion of Tier 1 capital. This means that the additional capital needed can easily be raised over the remaining period until full implementation.  For the purpose of comparison, the Annex to the Report shows the impact of the baseline Basel III proposals, i.e. prior to the implementation of the EU adjustments, or the adaptation of specific discretions, that are part of the revised CRR3.

Overview of the results

Overall, the results of the mandatory Basel III monitoring exercise show that European banks’ minimum Tier 1 capital requirement would increase by 7.8% at the full implementation date in 2033.  The main contributing factors are the output floor and operational risk.  The overall minimum Tier 1 capital requirement for large and internationally active banks (Group 1) would increase by 8.6%. The requirements for the global systemically important institutions (G-SIIs, subset of Group 1) and for Group 2 banks would increase by 12.2% and 3.6%, respectively.

Note to the editors

• The Report assesses the impact of the EU specific implementation (CRR3) on EU banks of the final revisions to the frameworks of credit risk (split into four sub-categories), operational risk and the leverage ratio. In addition, the introduction of the aggregate output floor is considered. The Report further quantifies the impact of the implementation of the new standards for market risk (FRTB) and credit valuation adjustments (CVA).
• The Report shows the results of the EU specific implementation separately for Group 1 and Group 2 banks. Group 1 banks are those with Tier 1 capital more than EUR 3 billion, and they are internationally active. All other banks are categorised as Group 2 banks.
• The Report shows the results of the EU specific implementation separately for three broad business models: ‘universal’, which is a business model offering most of the banking services, ‘retail-oriented’, which focuses on retail clientele, and ‘corporate-oriented and other’, which incorporates the remaining institutions.
• An interactive tool showing the main results is made available for analytical purposes. The official figures and conclusions are the ones presented in Report. Therefore, any interpretation based on the data provided within the visualisation tool must be done with caution.
• The Annex to the Basel III monitoring Report shows the impact of the implementation of the baseline Basel III framework prior to the inclusion of additional features that are included in the CRR3/CRD6 and EU adaptation of Basel III discretions.
• The drop in the impact expressed in Tier 1 minimum required capital is mainly attributed to the fact that G-SIIs already implemented in 2023 the additional leverage ratio requirement of 50% of G-SIIs surcharge atop the 3% minimum required capital of the leverage ratio exposure measure. This led to an increased requirement for the current implementation, resulting in a reduced impact when compared with the full implementation capital requirements, which remained stable for the leverage ratio. This is reflected in the reduced impact of G-SIIs with spillover effects to Group 1 banks and all banks, of which G-SIIs are a subset. On the other hand, the impact on Group 2 was not affected by this implementation.
• The impact shown in the point-in-time analysis of the third mandatory Basel III monitoring Report is not directly comparable to the previous mandatory exercises. Thus, when comparing the results over time, Table 5 of the Basel III Monitoring Report should be considered.

Source: European Banking Authority

The European Banking Authority (EBA) published today a Report on eligibility and use of credit insurance, in response to the European Commission’ request under the Capital Requirements Regulation (CRR3). In this Report, the EBA calls for an alignment of EU rules with the present Basel framework.

The EBA had previously commented on the topic of credit insurance as a credit risk mitigation (CRM) technique. The comments were included in its Opinion published in March 2020 (‘the EBA Opinion’), which concluded that no preferential treatment was warranted based on the policy arguments and the data available at that point in time.

The Report revisits the prudential banking framework on CRM in relation to the changes affecting credit insurance that were introduced in the final Basel III framework, to take account of the level-playing field considerations compared to other products with similar features, or players subject to the same modelling restrictions as credit insurers.

In particular, the Report notes that credit insurance brings dual recourse to institutions in the event of the default of the obligor, as the bank has recourse to the credit insurer on top of the obligor, while this feature is not recognised in the Basel framework. Dual recourse is, however, a feature shared by any form of unfunded credit protection (UFCP), such as guarantees. Hence, credit insurance is not put at disadvantage compared to any form of UFCP.

Beyond the policy arguments, the EBA analysed supervisory and industry empirical data to assess the potential conservativeness of the supervisory-prescribed loss given default (LGD), subject to the caveat that no credit insurer in the European Union has so far defaulted. This analysis has led to a lack of satisfactory data evidence that could anchor any potential re-calibration of the framework and deviation from Basel.

Based on the considerations above, the Report concludes that the analysis of the theoretical framework applicable to credit insurers, as well as the empirical data available, are not sufficient to warrant a deviation for credit insurers from the international agreements.

Legal basis

This Report has been drafted to address the mandate under Article 506 of Regulation (EU) 2024/1623 of the European Parliament and of the Council of 31 May 2024 amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor.

Source: European Banking Authority

The European Banking Authority (EBA) published today its Work Programme outlining the key priorities and initiatives for 2025. Throughout next year, the EBA will be  i) implementing the EU Banking Package and enhancing the Single Rulebook, ii) enhancing risk- based and forward-looking financial stability for a sustainable economy, iii) enhancing data infrastructure and launching a data portal, iv) starting oversight and  supervisory activities under the Digital Operational Resilience Act (DORA) and Markets in Crypto-Assets Regulation (MiCAR), and v) developing consumer oriented mandates and ensuring a smooth transition to the new anti-money laundering and countering the financing of terrorism (AML/CFT) framework.

 The EBA will work in close cooperation with the relevant EU and non-EU stakeholders. As far as the DORA oversight is concerned, it will implement a joint function with EIOPA and ESMA. While dedicated resources have been foreseen for the new DORA and MiCAR responsibilities, as well as the review of the European Market Infrastructure Regulation (EMIR), the EBA will continue to carefully allocate and prioritise work, drawing on synergies and building on organisational change introduced in recent years which have enhanced the EBA’s agility, planning, and technology adoption.

The executive summary of the EBA Work Programme for 2025 will be made available in all official EU languages.

Legal basis and background

The EBA Board of Supervisors, on the basis of a proposal by the EBA Management Board, has adopted the Work Programme in accordance with Article 43 of the EBA Founding Regulation.

As in previous years, the Work Programme was informed by the recommendations of the EBA’s Advisory Committee on Proportionality and the input from the European Commission. 

Source: European Banking Authority

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have appointed Marc Andries to lead their new joint Directorate in charge of oversight activities for critical third-party providers established by the Digital Operational Resilience Act (DORA). Marc Andries takes up his new role as Director for DORA joint oversight on 1 October 2024.

Notes to editors

In his role as DORA Joint Oversight Director, Marc Andries will be responsible for implementing and running an oversight framework for critical ICT third-party service providers (CTPPs) at a pan-European scale, contributing to the smooth operations and stability of the EU financial sector.

Marc Andries has held responsibilities in the areas of IT for more than thirty years, with experience in ICT project management, oversight and supervision. He has been an active member of many international groups dealing with ICT risks. Prior to assuming this role, Marc Andries was Chief Inspector at Banque de France and Head of the IT Inspection Unit at the French Prudential Supervision and Resolution Authority (ACPR).