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Prudential Regualtion Review  

May 2018  

Key highlights

In May, the EBA announced that, by summer 2019, it will provide technical advice and policy recommendations on the implementation of Basel 3 in order to support the Commission in drafting a "CRD6/CRR3" legislative proposal. Again, in May, there was a continued focus on Non-Performing loans from the ECB, with the Chair of the supervisory board of the ECB stating that they have intensified their review of banks’ valuation and classification approaches. Locally, the Central Bank of Ireland Deputy Governor of Central Banking has argued the case in favour of setting a positive Countercyclical capital buffer and have also released a letter considering whether Central Banks have the tools necessary to deal with another depression if long-run real interest rates remain at their low level.

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Other topics covered

  • Capital 
  • Crisis Management
  • Rethinking the domestic and international architecture for regulation
  • Disclosure, valuation and accounting
  • Central Bank of Ireland

EU Bank Capital Negotiations: Update on the European Council's Agreement of a General Approach 

The European Council has reached an agreement on the ‘CRD5/CRR2’ bank capital proposal (including amendments to the BRRD). This is a very important milestone in EU negotiations on the bank capital framework and, although further negotiations now need to occur with the European Parliament, we now have a much better sense of what to expect in the final deal.

The proposed legislation implements components of the Basel III framework in the EU, including giving effect to TLAC, the NSFR, and the leverage ratio. But it excludes the package of Basel reforms that was agreed on 7 December 2017 by the Basel Committee on Banking Supervision (BCBS) (i.e. SA credit risk, IRB constraints, operational risk, and standardised output floors), often referred to as ‘Basel IV’.

EMEA Centre of Regulatory Strategy

If you would like to contact a member of the EMEA Centre for Regulatory Strategy then please click on the below links:

Rod Hardcastle - Director, Centre for Regulatory Strategy UK

John Andrews - Senior Manager, Centre for Regulatory Strategy UK

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Update on the European Council's Agreement of a General Approach  

EU Bank Capital Negotiations  

Prudential Regulation Review 

April 2018