CRD/CRR and LCR

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Banking supervision - ECB launches consultation on harmonising the exercise of options and discretions in Union law

November 2015

CRD/CRR and LCR

The European Central Bank (ECB) on 11 November 2015 published the draft ECB Regulation on the exercise of options and discretions available in Union law and the draft ECB Guide on options and discretions available in Union law. These documents lay down how the exercise of options and discretions provided in the CRR/CRD and the LCR delegated act is to be harmonised in the euro area.

The draft Regulation is a binding legal act and sets out the framework for the exercise of options and discretions in Union law (CRR/CRD and LCR delegated act) and mandated to competent authorities, concerning prudential requirements for credit institutions. The options and discretions, conferred to national authorities and directly applicable to credit institutions classified as significant, concern provisions for own funds, capital requirements, large exposures, liquidity and transitional provisions of CRR, and the ECB suggests particular ways of interpretation, methodology and timelines that should be taken into account by the authorities when exercising their discretion. The Regulation should take effect around March 2016.

The draft Guide (a non-legally binding document) sets out the criteria which should be taken into account by the supervisory teams in determining the prudential requirements for significant credit institutions The policies will be used as guidance by the Supervisory Teams when assessing individual requests and decisions that would involve the exercise of an option or discretion. It aims to provide coherence, effectiveness and transparency on the supervisory policies that will be applied in supervisory processes within the Single Supervisory Mechanism. In particular, it aims to assist the Joint Supervisory Teams in the performance of their tasks with regard to the principles the ECB intends to follow in supervising significant credit institutions.


The consultation period began on 11 November 2015 and ends on 16 December 2015. The ECB will hold a public hearing on 11 December 2015.

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