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Source: European Banking Authority

The European Banking Authority (EBA) published today an updated list of capital instruments that are classified as Common Equity Tier 1 (CET1).

Since the publication of the previous update in December 2022, the reference to the grandfathered instruments has been deleted as the grandfathering provisions under the Capital Requirements Regulation (CRR) came to an end on 31 December 2021. In addition, a few new instruments have been added and some others, no longer in use, have been deleted. Finally, the list reflects changes in relevant national legislative provisions.

Source: European Banking Authority

The European Banking Authority (EBA) has appointed Kamil Liberadzki as new Director of its Economic & Risk Analysis Department. Kamil Liberadzki, who will be responsible for assessing and monitoring financial stability and the risks and vulnerabilities in the EU banking and financial sector, takes up his new role on 18 November 2024.

Notes to editors

Prior to his new role, Kamil Liberadzki was the Director of the Regulatory Development Department at the Polish Financial Services Authority (FSA), which he also represented at the EBA Board of Supervisors and Management Board. At the Polish FSA he held other posts, including that of Deputy Director of the Commercial Banking Department responsible for off-site supervision. Kamil also represented the Polish FSA at the Basel Consultative Group and was coordinator of the ESG Group within the Polish Authority.

Kamil Liberadzki is also a Professor of Economic Sciences and faculty member at the Warsaw School of Economics (SGH), where he teaches courses for master’s and postgraduate programmes. He is also visiting professor at the University of Navarra.

Source: European Banking Authority

The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published today a Decision on the information that competent authorities must report to them for the designation of critical ICT third-party service providers under the Digital Operational Resilience Act (DORA). In particular, the Decision requires competent authorities to report by 30 April 2025 the registers of information on contractual arrangements of the financial entities with ICT third-party service providers.

Following the entry into force of DORA on 17 January 2025, the ESAs, together with competent authorities, will start the oversight of critical ICT third-party service providers (CTPPs) offering services to financial entities in the EU. The first oversight activity is the designation of CTPPs.

The Decision published today provides a general framework for the annual reporting to the ESA of the information necessary for the CTPP designation, including: timelines, frequency and reference dates, general procedures for the submission of information, quality assurance and revisions of submitted data, as well as confidentiality and access to information.

As the deadline for the first submission of the registers of information to the ESAs is set for 30 April 2025, the ESAs expect competent authorities to collect the registers of information from the financial entities under their supervision in advance, following their own timelines.

Although the implementing technical standards (ITS) on the Registers of information have not yet been adopted by the EU Commission, the ESAs note that the essential part of the requirements for registers of information is publicly available since the publication of the ESAs Final Report in January 2024 and that any potential changes in the registers following the rejection by the EU Commission and the ESAs Opinion on the rejection should be limited. Therefore, the ESAs encourage financial entities to anticipate as much as possible the preparation of their registers, especially for information which may not be immediately available (e.g. the relevant identifiers of their ICT providers).

Support to the industry

To support the industry preparations, the ESAs have shared the draft templates, data point model and reporting technical package in May 2024 and have carried out a voluntary Dry Run exercise on reporting of registers of information with participation of around 1000 financial entities across the financial sector in the EU.

The ESAs also published today a list of validation rules that will be used when analysing the registers of information and the visual representation of the data model. These rules will be included in the updated reporting technical package (including updated data point model, taxonomy and validation rules), which is set to be published in December 2024.

Workshop

Financial entities who would like to learn more about how to prepare their registers of information and hear about the outcomes of the 2024 Dry Run exercise, are invited to take part in an information workshop on 18 December 2024.

The workshop will be held virtually from 10:00 to 13:00. Interested parties can register by 16 December 2024  at the following link.

Legal basis and background

Article 31(1)(a) of Regulation (EU) 2022/2554 (DORA) requires the ESAs, through the Joint Committee and upon recommendation of the Oversight Forum, to annually designate the CTPPs. That designation is to be based on the criteria referred to in Article 31(2) of DORA and the Commission Delegated Regulation (EU) 2024/1502 (Delegated act on criticality).

To perform the designation, the ESAs will need the information necessary for the assessment of the criticality criteria referred to in Article 31(2) of DORA and that set out in the Delegated act on criticality, and will need to collect from this from CAs. This information will need to be reported to the ESAs on annual basis for the CTPP designation. To ensure a common approach throughout the financial sector, the ESAs need to adopt a joint decision on the basis of Article 35 of their Founding Regulations.

Source: Government of the Netherlands

News item | 15-11-2024 | 15:00

The group of experts from Denmark, Estonia, Finland, Germany, Iceland, Latvia, Lithuania, the Netherlands, Norway, Poland, Sweden and the United Kingdom are seeking to work together more closely in order to better detect and monitor the shadow fleet.

What is the Russian shadow fleet? On account of sanctions against Russia, Russian ships are no longer permitted to dock in European ports, and there is a ban on the export of Russian oil to the European Union. Russia is attempting to circumvent these rules with a ‘shadow fleet’, using ships which do not have clear registrations and flags and which have their transponders switched off. This fleet also poses a danger to the environment and maritime safety and security, especially for the coastal states.

Third meeting

This meeting in Helsinki and Tallinn was the third of its kind, following previous talks in Copenhagen and Oslo. At the meeting the countries stressed the importance of information-sharing and joint actions, such as the coordination of sanctions.

The group of experts focused mainly on the activities of the shadow fleet in the North Sea and the Baltic Sea. In these sensitive and busy waters, the risk of environmental damage and maritime accidents is especially great.

Joint statement

In a joint statement the coastal countries stressed the importance of close cooperation and information-sharing. They also agreed to work closely on imposing sanctions and to explore new common measures against the Russian shadow fleet.

Source: European Banking Authority

The European Banking Authority (EBA) today published an Opinion on the amendments proposed by the European Commission to the EBA final draft Implementing Technical Standards (ITS) on public disclosures by institutions and supervisory reporting under the revised Capital Requirements Regulation (CRR3). The EBA acknowledges that the Commission’s proposal provides some flexibility compared to the current version of the ITS and accepts it as an intermediate step. The Commission and the EBA will continue to work together to better articulate and further operationalise these ITS.

In the final package submitted by the EBA to the Commission this year, only the main body of the ITS on public disclosures and on supervisory reporting were meant to published in the EU Official Journal, while the templates and instructions were supposed to be accessible through the EBA website. The Commission proposed to re-include the templates in the normative package to be published in the Official Journal.

In the Opinion, the EBA acknowledges that the changes proposed by the Commission still maintain some of the flexibility originally envisaged and agreed on under the CRR3 mandates for the ITS. The EBA also notes that the original approach to keep both templates and instructions on the EBA website only, would be a preferred one, as it provides more flexibility in the development of such IT solutions.

The EBA accepts the European Commission’s proposal, although it considers it as an intermediate step on the basis of which both the EBA and the European Commission will continue to work together to better articulate and further operationalise the ITS in accordance with the mandates under the CRR3.

Legal basis and background

This Opinion is based on Article 15(1), fourth subparagraph, of Regulation (EU) No 1093/2010 (‘EBA Regulation’), which requires the Authority to submit its response in the form of an opinion to amendments proposed by the European Commission.

On 20 June 2024, the EBA submitted to the European Commission, for adoption, the draft ITS on pillar 3 disclosures. On 5 July 2024, the EBA submitted to the European Commission, for adoption, the final draft ITS on supervisory reporting.

On 7 and 28 October 2024, the European Commission informed the EBA of its intention to endorse the draft ITSs with amendments and submitted a modified version of the ITSs.

Source: European Banking Authority

The European Banking Authority (EBA)  today published two sets of final Guidelines that, for the first time, set common EU standards on the governance arrangements and the policies, procedures and controls financial institutions should have in place to be able to comply with Union and national restrictive measures.

Weaknesses in internal policies, procedures and controls expose financial institutions to legal, reputational risks, and undermine the effectiveness of the EU’s restrictive measures regimes, leading to potential circumvention and affect the stability and integrity of the EU’s financial system.

The first set of Guidelines is addressed to all institutions within the EBA’s supervisory remit. They include provisions that are necessary to ensure that financial institutions’ governance and risk management systems are sound and sufficient to address the risk that they might breach or evade restrictive measures.

The second set of Guidelines is specific to payment service providers (PSPs) and crypto-asset service providers (CASPs) and specify what PSPs and CASPs should do to be able to comply with restrictive measures when performing transfers of funds or crypto-assets.

Legal basis and Background

In July 2021, the European Commission issued a legislative package with four proposals to reform the EU’s legal and institutional anti-money laundering and countering the financing of terrorism (AML/CFT) framework. The legislative package included a proposal for a new Regulation (EU) on information accompanying transfers of funds and certain crypto-assets. This Regulation (EU) 2023/1113 was adopted on 9 June 2023 and applies from 30 December 2024.

Article 23 of this Regulation requires the EBA to issue guidelines on internal policies, procedures and controls to ensure the implementation of Union and national restrictive measures when performing transfers of funds and crypto-assets under this Regulation.

The EBA complements the Guidelines under Regulation (EU) 2023/1113 with own-initiative Guidelines to address wider internal controls and risk management issues, based on Articles 74 of Directive 2013/36/EU, 11(4) of Directive (EU) 2015/2366 and 3(1) of Directive (EC) 2009/110/EC.  These Guidelines clarify how restrictive measures policies and procedures interact with financial institutions’ wider governance and risk management frameworks, to avoid operational and legal risks for financial institutions and ensure an effective implementation of restrictive measures.

The deadline for competent authorities to report whether they comply with the Guidelines will be two months after the publication of the translations into the official EU languages. The amending Guidelines will apply from 30 December 2025.

Source: European Banking Authority

The European Banking Authority (EBA) today released an updated list of third-country groups (TCGs) and third-country branches (TCBs) operating across the European Union and European Economic Area (EU/EEA). This annual publication enhances market transparency by providing stakeholders with clear information on the ownership structures of institutions operating within the EU/EEA under foreign control.

The 2024 update identifies 439 third country groups from 50 countries outside the EU/EEA that are currently active in the area. Among these, 8 groups have established intermediate EU parent undertakings (IPUs), as required by EU regulations, with 2 groups having dual IPUs. Additionally, 61 TCGs have branches in the EU/EEA, resulting in a total of 95 third country branches spread across EU/EEA.

This Report is part of the EBA’s efforts to ensure that market participants have clarity regarding the direct ownership and presence of foreign institutions within the EU/EEA, contributing to a stable and transparent banking environment.

Legal basis and background

• According to Article 21b of Directive 2013/36/EU (Capital Requirements Directive – CRD), third country groups (TCGs) operating through ​more than one institution in the Union and with total assets of EUR 40 billion or more are required to have an intermediate EU parent undertaking (IPU).
• The EBA has a key role to play in facilitating cooperation between National Competent Authorities and in supporting their IPU decision-making process.
• In July 2021, the EBA Guidelines (EBA/GL/2021/08) provided a common methodology for the calculation of the total value of assets in order to achieve consistent application of Union law.
• In May 2022, the EBA published the decision (EBA/DC/441) on supervisory reporting for the threshold monitoring of the intermediate EU parent undertaking to ensure a timely application of the IPU requirement.

Source: Government of the Netherlands

News item | 12-11-2024 | 16:00

NATO Summit 2025 Logo

The logo designed for this Summit reflects the strength of cooperation within NATO, and its adaptability in times of flux. We have chosen a logo where the stylised blades of a wind turbine, combined with the Dutch coastline, visually represent movement. The logo will be used in communications about the Summit and will be on display in The Hague before and during the event.

Major logistical operation

Organising the NATO Summit is one of the biggest logistical operations to be conducted in the Netherlands in decades. It involves a large number of government organisations, including several ministries, Rijkswaterstaat, the municipality of The Hague, the police and Schiphol Airport. In the run-up to the summit, the Ministries of Foreign Affairs and Defence will support a number of events aimed at raising public awareness about the issues to be discussed at the summit.

NATO allies

At the previous summit, in Vilnius, Lithuania, NATO allies asked the Netherlands to organise the 2025 event. This is the first time since NATO’s founding in 1949 that the Netherlands is hosting a NATO Summit. NATO is committed to the principle that an attack on one is an attack on all. We support and protect each other on the basis of that principle.

Source: European Banking Authority

The European Banking Authority (EBA) today launched a consultation on its draft Guidelines that will specify proportionate retail diversification methods to be eligible for the preferential risk weight under the standardised approach for credit risk. The Consultation paper follows the recommendations from the EBA Advisory Committee on Proportionality for 2024 in the credit risk area The consultation runs until 12 February 2025.

In its draft Guidelines the EBA is setting out criteria to assess under which circumstances, retail exposures can be considered as diversified under the credit risk standardised approach for determining capital requirements in the Capital Requirements Regulation (CRR). The requirement to have a diversified portfolio, (i.e. that a portfolio consists of a significant number of exposures with similar characteristics) ensures that the risks credit institutions will have to bear for such exposures are reduced. In addition, the requirement to be diversified is mandatory for retail exposures to be assigned the preferential retail risk weight under the Standardised Approach for credit risk.

As a starting point, the EBA is considering the 0.2% granularity criterion set out in the Basel framework, according to which no individual exposure in the retail portfolio should exceed 0.2% of the retail portfolio. Under the EBA’s proposal, institutions with exposures above the 0.2% granularity criterion will, however, still be considered sufficiently diversified, as long as no more than 10% of their retail portfolio exceeds the 0.2% threshold. This adjustment ensures a proportionate and harmonised approach, which takes into account the significant number of smaller institutions in EU. In addition, the approach taken is simple, which allows the calculation to be done by all institutions and is thereby proportionate to the size of institutions and their retail portfolios. 

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 12 February 2025.

The EBA will hold a virtual public hearing on this consultation paper on Monday 16 December 2024, from 15:00 to 16:00 CET. The EBA invites interested stakeholders to register using this link by Thursday 12 December 2024 at 16:00 CET. 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 and background

The draft Guidelines have been developed according to Article 123(1) of Regulation (EU) No 575/2013 (CRR), as amended by Regulation (EU) 2024/1623.  

Source: European Banking Authority

The European Banking Authority (EBA) today released the final methodology, draft templates, and template guidance for the 2025 EU-wide stress test, along with the milestone dates for the exercise. The methodology and templates cover all relevant risk areas and incorporate feedback received from the industry. The stress test exercise will formally start in January 2025, following the release of the macroeconomic scenarios, with the results scheduled for publication in early August 2025.

The 2025 EU-wide stress test adopts a constrained bottom-up approach, incorporating some top-down elements. Balance sheets are assumed to remain constant, with the primary focus being the evaluation of the impact of adverse shocks on banks’ solvency. Participating banks will be required to estimate the progression of common risk factors (credit, market, counterparty, and operational risks) under a baseline and an adverse scenario. Additionally, banks must project how these scenarios will affect key income streams. For net fee and commission income, securitisation risk weights, and the credit loss trajectory of sovereign exposures, banks will use pre-defined parameters. In addition, the projections of net interest income will be centralised. The methodology also defines the sample of banks involved in the exercise.

The draft stress test templates and guidance published today might need some minor technical adjustments before their final publication at the launch.

Key Milestones for the 2025 EU-wide Stress Test:

• Launch of the exercise: second half of January 2025
• First submission of results to the EBA: end of April 2025
• Second submission to the EBA: early June 2025
• Final submission to the EBA: early July 2025
• Publication of results: beginning of August 2025

Compared to the previous stress test, the timeline has been adjusted to accommodate the feedback received from the industry and the entry into force of the revised Capital Requirements Regulation and Capital Requirements Directive (CRR3/CDR VI).

Note to the editors

1. The aim of the EU-wide stress test is to assess the resilience of EU banks to a common set of adverse economic developments, identifying potential risks, informing supervisory decisions, and increasing market discipline.
2. The EBA conducts the stress test in a bottom-up fashion with some top-down elements, using consistent methodologies, scenarios, and key assumptions developed jointly with other authorities.
3. The exercise is coordinated by the EBA in cooperation with the European Central Bank, the European Systemic Risk Board, and the Competent Authorities from all relevant national jurisdictions.
4. To give banks sufficient time to prepare, the EBA published the methodology and templates well ahead of the formal launch, when the relevant macroeconomic scenarios will be released.