Author: Selwyn Manning

Source: European Banking Authority

The European Banking Authority (EBA) today launched a public consultation on revised Guidelines on limits on exposures to shadow banking entities carrying out banking activities outside a regulated framework. The revised Guidelines aim to align with the updated EU large-exposure reporting framework and to support sound risk management and governance practices across institutions.

The consultation paper aligns the Guidelines with the revised regulatory framework following the entry into force, in January 2024, of the Regulatory Technical Standards (RTS) specifying criteria to identify shadow banking entities for large-exposure reporting. It updates the scope of application and the basis for limits by moving from eligible capital to Tier 1 capital, while preserving existing governance requirements and the primary and fallback methods for setting exposure limits. The proposal also removes the 0.25% materiality threshold to simplify the framework.

The consultation invites feedback on potential implementation impacts. It also gathers input on current practices and on the possible effects of quantitative limits on lending to shadow banking entities. In addition, it requests information on how institutions identify exposures to shadow banking entities, set limits, and manage related risks.

This input will support policy decisions when finalising the Guidelines and to inform broader policy work on shadow banking entities feeding into (i) a report on the contribution of shadow banking entities to the Capital Markets Union and (ii) an assessment of Institutions’ exposures and limits to shadow banking entities, expected to be delivered in December 2027.

Consultation process

Comments to the consultation paper can be sent by clicking on the “send your comments” button on the EBA’s consultation page . The deadline for the submission of comments is 9 July 2026 at 23:59 CEST.

The EBA will hold a virtual public hearing on 25 June 2026 from 10:00 to 12:00 CEST. The EBA invites interested stakeholders to register using this link by 17 June 2026 at 16:00 CEST. The dial-in details will be communicated to those who have registered for the meeting.

All contributions received will be published following the end of the consultation, unless requested otherwise.

Legal basis

Article 395(2) of the Regulation (EU) No 575/2013 (CRR 3) mandates the EBA to revise the Guidelines on limits on exposures to shadow banking entities that carry out banking activities outside a regulated framework by 10 January 2027. It also mandates the EBA, to submit a report to the European Commission on the contribution of SBEs to the Capital Markets Union and on institutions’ exposures to such entities, assessing in particular the appropriateness of aggregate or tighter individual limits to those exposures, taking due account of the regulatory framework and business models of such entities by 31 December 2027.

Background

Under the CRR, a shadow banking entity is any non‑bank entity that performs bank‑like credit intermediation activities but is not subject to equivalent prudential regulation and supervision, as specified in binding EBA RTS under Article 394(4).

The EBA Guidelines on limits concerning exposures to shadow banking entities, first issued in 2015, set out guidance for institutions’ risk management and limits with respect to exposures to entities providing banking activities outside the regulated framework. Building on these original guidelines, and when further  mandated by Article 394(2) of CRR2  to operationalise institutions’ reporting obligations of their largest exposures to shadow banking entities on a consolidated basis, the EBA delivered in 2022 RTS on the criteria for the identification of shadow banking entities (link), thereby introducing a legally binding framework that clarifies the criteria for identifying shadow banking entities.

This update aims to ensure alignment with this regulatory framework while maintaining the complementary provisions that remain relevant for supervisory and risk management purposes.

Source: European Banking Authority

The European Banking Authority (EBA) today announced that it will begin publishing, on a regular basis, a list of known issues related to the data point model (DPM) framework. The list will include information on available workarounds and indicative timelines for resolution. This initiative is intended to improve transparency and to support reporting institutions by providing a single reference point for recurring technical questions.

This publication of the list forms part of the EBA’s broader simplification efforts to identify pragmatic ways to support the implementation of reporting requirements and reduce unnecessary operational burden, while preserving data quality and supervisory objectives. It also complements existing communication channels, including validation rule releases, taxonomy updates and Q&A processes, and reflects the EBA’s continued commitment to supporting high-quality, consistent and efficient supervisory and resolution reporting across the EU.

As a first step, the EBA is publishing a list of known issues affecting Pillar 3 disclosures and resolution planning reporting, as these frameworks have generated a particularly high volume of queries from institutions and national competent authorities. For each issue, the published file provides a brief description, the affected artefacts, assessed severity, current status, any available workaround, and the expected release in which the issue is planned to be resolved.

The list will be updated regularly and gradually extended to cover additional reporting and disclosures modules supported by the EBA DPM framework and XBRL taxonomy. Through this phased approach, the EBA aims to provide institutions with timely, clear and practical information, while maintaining the stability of the reporting frameworks.

Source: European Banking Authority

François-Louis Michaud will take up his position as Chair of the European Banking Authority (EBA) as from the 16 April 2026, following today’s formal appointment by the Council of the European Union.

Helmut Ettl, Vice Chair of the EBA, commented on the appointment:

“As the Vice Chair of the EBA, I warmly congratulate François-Louis on his appointment as Chairperson after a very selective process. His extensive experience in banking supervision and regulation and financial stability, gained across international, European and national institutions in four different countries, together with his leadership, will serve the Authority well. He takes up this role at a particularly important time for the European financial system, and I wish him every success in his new role.”

Speaking upon taking up his new role, François-Louis Michaud, said:

“It is an honour to take up the role of Chairperson of the EBA, and a responsibility to take it at this important juncture for the European financial system and for the EBA. I am committed to ensuring that the EBA continues to deliver effective and consistent regulation and supervision across the EU and supports a resilient, efficient and competitive Single Market. I look forward to building on the strong foundations laid by my predecessors, and to working closely with all EBA stakeholders in the years ahead.”

Note to the editors

The Council appointed Mr Michaud on 26 February 2026, following a selection process that included a shortlist provided by the EBA’s Board of Supervisors and interviews with candidates in January 2026. After a hearing of the candidate selected by the Council, the European Parliament confirmed his appointment at its Plenary session on 10 March 2026.

François-Louis Michaud’s term of office runs for five years and may be extended once.

François-Louis has been serving as Executive Director of the EBA since 1 September 2020. The EBA will shortly launch the recruitment of the next EBA Executive Director.

Source: Government of the Netherlands

News item | 27-03-2026 | 17:10

Minister Berendsen: ‘Countering Russian aggression goes hand in hand with our support for a democratic Ukraine governed by the rule of law. Working under difficult circumstances, Ukraine must continue to make progress with reforms on the path to EU membership. The Netherlands attaches great importance to the accession criteria, but Ukraine does not have to walk this path alone. That is why the Netherlands is more than willing to lend a helping hand.’

The conference aims to strengthen mutual cooperation and knowledge-sharing in order to support Ukraine in meeting the conditions for EU accession, known as the Copenhagen criteria. The Dutch delegation consists of representatives from six ministries. Discussions with their Ukrainian counterparts will cover topics such as the rule of law, good governance, energy, agriculture and social affairs.

Mayor of Breda Paul Depla: ‘We’re honoured to host this important conference in our city. Breda is twinned with Lviv, so we feel a close connection and are following the current situation in Ukraine with concern. Wherever possible we’re offering emergency aid and support to the reconstruction process.’

A business forum will take place on Monday, prior to the conference. Dozens of Dutch and Ukrainian companies active in the energy, construction and agricultural sectors are taking part in this first edition of the Netherlands-Ukraine Business Forum. Minister Sjoerdsma will officially close the event.

Minister Sjoerdsma: ‘The involvement of Dutch companies is essential for the reconstruction of Ukraine. They contribute to the country’s recovery by sharing their knowledge and expertise with Ukrainian partners and by entering into new partnerships. This also offers business opportunities, both now and in the future. A win-win for the Netherlands and Ukraine.’

Source: European Banking Authority

The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published their spring 2026 Joint Committee update on risks and vulnerabilities in the EU financial system. The update focuses on the challenges arising from ongoing geopolitical tensions and developments in private finance.

Geopolitical tensions continue to pose significant risks

The ESAs warn that ongoing geopolitical tensions, namely the  war in the Middle East, pose significant risks  to the global financial landscape through higher energy prices, potential inflationary pressures and weaker economic growth. The ESAs had previously warned about the risks of sudden repricing and liquidity reductions at times of elevated equity market valuations and compressed spreads in bond markets. Such developments can exacerbate market vulnerabilities, triggering volatility and revaluations.

Higher interest rates may further tighten funding conditions and affect asset quality. Tensions around the Strait of Hormuz and airspace closures raise multi-line risk, although war exclusions are expected to limit net losses for insurers. More broadly geopolitical events and cyber-attacks could generate shocks and disruptions to critical infrastructures. 

Risks linked to private finance

The update also highlights emerging risks in private finance driven by limited data, low transparency, prolonged growth and complex, opaque interconnections with the broader financial system. These factors increase the potential for sudden market shifts in investor liquidity and spillovers to other parts of the financial system.

Recent developments in certain US private credit funds, linked to AI replacing more traditional software businesses, illustrate potential vulnerabilities related to changes in investor sentiment.

EU financial sector remains resilient overall

Despite the challenging geopolitical environment, European financial markets have continued to demonstrate resilience. The insurance and Institutions for Occupational Retirement Provision (IORP) sectors maintain robust capital and funding positions.  In the banking sector, capital ratios remain high, while liquidity positions and asset quality are solid. Direct exposures to countries most affected by the war remain limited.

Supervisors and market participants to maintain vigilance

Given the ongoing geopolitical tensions, the Joint Committee of the ESAs calls on supervisors and market participants to maintain a high level of readiness. This includes proactive risk assessments with appropriate tools, the prudent management of sovereign exposures and the inclusion of geopolitical context in risk management. Possible indirect effects stemming from energy prices and exposures to highly affected sectors, should also be closely monitored. 

Financial institutions, authorities and investors are also encouraged to closely monitor and manage risks associated with private markets, considering limited transparency, rising exposures, and potential shifts in risk profiles, linked to the upcoming Solvency II 2027 changes.

Background

This Spring 2026 Joint Committee update on Risks and Vulnerabilities was presented at the meeting of the Financial Stability Table of the EU’s Economic and Financial Committee (FST-EFC) on 19-20 March 2026 as input from the ESAs.

Source: European Banking Authority

Source: European Banking Authority

​Note to editors

Source: European Banking Authority

The European Banking Authority (EBA) today published its Q4 2025 Risk Dashboard (RDB), confirming that the EU/EEA banking sector remains robust with strong capitalisation, ample liquidity and solid asset quality, even as global economic uncertainty rises following renewed conflict in the Middle East.  For the first time, the RDB is published alongside the new Capital Requirements Regulation/Capital Requirements Directive (CRR3/CRD6) dashboard, which replaces the former Basel 3 monitoring Report.

The RDB provides disclosures on EU/EEA banks’ direct exposures to counterparties located in the Middle East, which totalled to EUR 132bn at end-2025. These exposures include around EUR 47bn in loans and advances to banks and other financial corporations and around EUR 33bn to non-financial corporations (NFCs)(see Figure 1). While exposures remain limited (less than 0.5% of total EU/EEA banks’ assets), the escalation of tensions could generate second-round effects, notably via higher energy prices, inflationary pressures, weaker global economic growth and disruptions to supply chains. These effects would be particularly in energy-intensive sectors such as transport, construction and certain manufacturing segments.

Capital buffers and profitability remain banks’ first lines of defence. Risk-weighted assets increased by just over 1% in 2025, reaching EUR 10.2 trillion in Q4 (Figure 2) , while the common equity tier 1 (CET1) ratio (transitional under the CRR3) remained stable at 16.3%. Return on equity held steady in double digits at 10.4% (10.5% in December 2024). The net interest margin (NIM), after declining from 1.66% in December 2024 to 1.58% in September 2025,  rose to 1.6%, suggesting that the downward trend observed in previous quarters may have reached its trough. The cost-to-income ratio rose to its highest level since March 2023, reflecting rising costs and seasonal effects (see Figure 3).

Total assets remained stable at EUR 29.1 trillion, while outstanding loans increased by more than 1%, driven mainly by residential real estate-backed loans and financing to small and medium-sized enterprises. Non-performing loan (NPL) volumes declined slightly to 370 billion, keeping the NPL ratio stable at 1.8%. Stage 2 loans continued to fall, reaching 9.1% (from 9.3% in Q3 2025), pointing to an improvement in asset quality ahead of any potential deterioration linked to geopolitical tensions and global supply chain disruptions (see Figure 4).

Liquidity conditions strengthened further. The liquidity coverage ratio (LCR) rose to 163.1% (from 160.7% in Q3 2025), with banks that exceed a ratio of 140% accounting for more than 80% of the total. The net stable funding ratio (NSFR) increased to 126.9%, while the loans-to-deposit ratio continued its downward trend, reaching 104.8%. Banks continued to focus on deposits in their funding mix. While total liabilities remained steady, banks recorded a significant rise in both household customer deposits and NFC deposits, with increases of 1.8% and 3.6% respectively over the final quarter of the year. This growth offsets declines in deposits from other credit institutions and in other liabilities, including deposits from central banks.

The newly released EBA’s CRR3/CRD6 dashboard, available on the European Data Access Portal (EDAP), provides forward-looking projections of key capital metrics across the full output floor implementation period (2025 to 2030) and under the fully-loaded framework. Under fully-loaded CRR3 implementation, the average CET1 ratio would slightly decrease but remain robust at around 15.3%. Such reduction reflects an average 4.7% relative increase in Tier 1 minimum required capital once the output floor is fully phased in.  The number of institutions bound by the output floor is projected to increase from 2 at December 2025 to 33 under the fully loaded implementation. Under the static balance sheet assumption, no capital shortfalls would emerge before 2030. At that point, the total capital shortfall is projected at EUR 424.8m, rising to EUR 12.7bn once the output floor is fully implemented, thus giving banks ample time to adjust. 

Note to editors

The output floor projections presented in the CRR3/CRD6 dashboard are based on the recalculation of risk weighted assets (RWAs) applying the calibration factors set out in Article 465(1) of the CRR3 (50%, 55%, 60%, 65%, 70% and 72.5%). The fully loaded figures reflect the final 72.5% calibration and reverse the impact of transitional arrangements that apply to SA equivalent RWAs for output floor purposes (Articles 465(3), (5), (9) and (13)).

Current supervisory reporting data do not yet fully capture credit risk transitional arrangements. As a result, the credit risk impact is recorded as zero in the dashboard and is not reflected in the total Tier 1 minimum required capital impact. This also affects the estimation of the fully loaded output floor impact, as the expiry of these transitional arrangements is expected to increase standardised equivalent credit risk RWAs and alter their proportion relative to total RWAs. This data limitation will be addressed in future releases of the supervisory reporting framework.

All computations are based on overall capital requirements (OCR) and do not include Pillar 2 Guidance (P2G).

Key indicators have been visualised in a dynamic way. To facilitate the navigation, here is the full list of key indicators that you can find in the graphs:

• Slide 1: EU/EEA Banks’ Direct Exposures to Counterparties Domiciled in the Middle East [DOWNLOAD DATA]
• Slide 2: Year-on-year changes in risk-weighted assets of EU/EEA banks by risk [DOWNLOAD DATA]
• Slide 3: Year-on-Year Drivers of Net Interest Income [DOWNLOAD DATA]
• Slide 4: Trend in IFRS 9 Stage 2 Loans: Volume (EUR bn) and Share of Total Loans (%) [DOWNLOAD DATA]

The figures included in the Risk Dashboard are based on a sample of around 160 banks, covering more than 80% of the EU/EEA banking sector (by total assets), at the highest level of consolidation, while country aggregates also include large subsidiaries (the list of banks can be found here).

Source: European Banking Authority

The European Banking Authority (EBA) today published its final draft amending Regulatory Technical Standards (RTS) on own funds and eligible liabilities shortening the timeframe for competent and resolution authorities to process institution’s applications to reduce own funds and eligible liabilities instruments from four to three months. The EBA concluded that authorities now have sufficient experience with these procedures to carry out the assessments more efficiently.

The targeted amendments to the Commission Delegated Regulation on own funds and eligible liabilities, therefore, aim to deliver immediate benefits by reducing unnecessary regulatory burden for institutions. In addition, following the exemption introduced by Directive (EU) 2024/1174 (the Daisy Chain Act), which removes the requirement for liquidation entities to obtain prior permission to reduce eligible liabilities instruments, the RTS provisions setting a simplified procedure for these entities have been deleted.

Legal basis and background

Articles 78 and 78a of Regulation (EU) No 575/2013, as amended by Regulation (EU) 2019/876, mandate the EBA to develop regulatory technical standards specifying, among other elements, the process, time limits, procedures and information requirements for authorities to approve reductions of own funds and eligible liabilities instruments.

The 2021 update of the RTS extended the assessment period from three to four months. Based on the experience gained since then, the EBA now proposes to revert to a three‑month timeframe.

Source: European Banking Authority

The European Banking Authority (EBA) issued today an updated list of validation rules under its Implementing Technical Standards (ITS) on supervisory reporting. The revised package identifies rules that (i) have been deactivated due to inaccuracies or IT-related issues, (ii) have been reactivated, or (iii) have undergone a severity status change.

Competent Authorities across the EU are reminded that data submitted in accordance with these ITS should not be formally validated against any rules that have been deactivated.

In addition, the EBA has released a small validation rules package, which includes:

• a micro taxonomy package and
• Data Point Model (DPM) validation rules updates scripts.

These components are required from release 4.0 onwards for each validation rules updates exercise. They ensure consistent amendments to the rules in both the taxonomy and the DPM. With the introduction of DPM 2.0 from release 4.0 onwards, validation rules are now embedded directly into both the taxonomy and DPM. This integration enhances consistency in implementation by reporting institutions, improves traceability of changes, and contributes to a more efficient and harmonised supervisory reporting process.