EBA publishes a no-action letter on the boundary between the banking book and the trading book provisions

The EBA published on 27th of February a no-action letter stating that competent authorities should not prioritize any supervisory or enforcement action in relation to the new banking book – trading book boundary provisions. The amendments to the Capital Requirements Regulation (CRR2) introduced certain elements of the Basel standards on the trading book / non-trading book boundary framework, which will enter into application as of 28 June 2023.

As part of the on-going legislative process amending the CRR2, both the Council and the Parliament, in their respective positions, proposed to postpone the application date of the boundary provisions to 1st of January 2025. However, the legislators’ effort to postpone the application date of the boundary provisions is void if the legislative process ends after 28 June 2023.

In this alert, you will read more about what impact it has and its conclusions.