Tracker, Financial Services Regulation & Compliance - Banking


DOMESTIC:

Central Bank publishes transcript of the press conference on the review of the Mortgage Measures 2016 held by the Governor of the Central Bank, Philip Lane

Governor Lane stated that the review had confirmed that the Mortgage Measures have been successfully implemented and announced changes to loan to value regulations. All first time buyers will now be required to provide a minimum deposit of 10 per cent of the value of the property.

Banking and Payments Federation Ireland publish monthly newsletter - BPFI Brief for January 2017

The newsletter provides a round up on the latest banking and payments news as well as issues on which BPFI is working. The January newsletter covered the joint workshop on mortgage arrears hosted by BPFI and MABS, stakeholder engagement with the European Investment Bank, the Central Credit Register, the EU Agenda for the Maltese Presidency, the BPFI response to consultation on Payments Account Directive and the EBC  consultation on leveraged transactions.

Central Bank publishes updated explanatory note  on AnaCredit High-Level Requirements and Scope

The AnaCredit Regulation outlines the collection of granular credit data based on harmonised ECB statistical reporting requirements, with a view to establishing a common granular credit database. The AnaCredit High-Level Requirements and Scope have been updated to reflect decisions on national discretion items and inclusion of reporting schedule.


EUROPEAN:

European Banking Federation publishes revised European Interbank Compensation Guidelines 2017

The Interbank Compensation Guidelines were developed as a recommended basis for the settlement of claims for compensation arising from same day high-value payments in euro made between banks and directed through any euro payment system or CSM located in the European Union. In view of the existence of negative interest rates in the euro area, an Appendix has been added giving guidance when the deposit facility rate published by the European Central Bank is below zero.

International Banking Federation publishes IBFed Newsletter 2016 winter edition

The Newsletter outlines IBFed's missions and priorities and reported on the 46th Board meeting hosted in Rome.

European Banking Authority updates Single Rulebook Q&A

The updated Q&A includes new questions and answers relating to the Capital Requirements Regulation on the:

  • eligibility of unconditional Financial Letters of Credit as eligible financial collateral;
     
  • risk weight of exposures with QCCPs;
     
  • recognition of minorities arising from an intermediate financial holding company;
     
  • exposures secured by immovable property vs. secured by mortgages on immovable property;
     
  • risk weighting under the standardised approach for credit risk for an exposure secured by a mortgage on a residential property which is a second home;
     
  • application of perfectly matching provisions to FX forwards;
     
  • supervisory permission for reducing own funds if the institution repays share premium to its shareholders;
     
  • calculation of the threshold for using the simplified approach for the determination of AVAs;
     
  • application level of materiality threshold for assessing the materiality of extensions and changes to the IMA;
     
  • meaning of "credit lines" in the context of conversion factors for certain off-balance sheet items;
     
  • recognition of unfunded credit protection / guarantees under Advanced IRB;
     
  • offset of Additional Value Adjustments against Expected Loss under Article 159;
     
  • review and validation of criteria for the use of a reduced number of parameters; and
     
  • reporting of inflows for term deposits with option for early withdrawal.

European Systemic Risk Board publishes report on cyclicality of capital requirements

The report recommends that the EU retains its current risk-sensitive framework for bank regulatory capital on the basis of the weak evidence on the existence of pro-cyclical effects due to the Capital Requirements Regulation and Capital Requirements Directive framework.

Basel Committee on Banking Supervision finalise Basel III reforms            

More time is needed to finalise some work, including ensuring the framework's final calibration, before the Group of Central Bank Governors and Heads of Supervision can review the package of proposals. However, the Committee is expected to complete this work in the near future.

European Banking Authority publishes updated Risk Dashboard - Data as of Q3 2016

The updated Risk Dashboard concluded that the EU banks’ capital ratios have significantly improved, the speed of improvement in banks' asset quality remains steady but slow, the coverage ratio for NPLs improved, increasing by 50 bps to 44.3% in Q3 2016, subdued profitability remains a concern, the net interest margin kept its downwards trend, slightly decreasing from 1.49% (Q2 2016) to 1.48% (Q3 2016) and the loan‐to‐deposit ratio kept its downward trend.

European Banking Authority publishes summary of results of the Risk Assessment Questionnaire

The results of the EBA’s the Risk Assessment Questionnaires conducted among banks and market analysts between October and November 2016 show that profitability is expected to remain a significant challenge and volume growth is assumed in specific portfolios like SME and retail lending. Operational risks, including litigation related costs, are expected to remain high.

Commission publishes Delegated Regulation supplementing the Capital Requirements Regulation in relation to conditions for data waiver permissions

The Delegated Regulation lays down the conditions under which competent authorities may grant institutions the permissions to use data covering a period of two rather than five years for probability of default, own loss given default and own-conversion factor estimates.

Benoît Cœuré, Member of the Executive Board of the European Central Bank, gives introductory statement at the session “Revitalizing the Global Economy” in Davos

The speech addressed raising the total factor productivity through the creation of new technologies at the global frontier, and the spread of such technology to other countries and non-frontier firms. Mr Cœuré also addressed the role of policy makers in encouraging innovation and providing a level playing-field that stimulates competition.

European Central Bank publishes a letter to Mr Werner Langen, MEP, and a letter to Mr Marco Valli and Mr Marco Zanni, MEPs, on TARGET2 operations

The letter addresses the recent increase in TARGET2 balances and states that the increases largely reflects liquidity flows stemming from the ECB’s asset purchase programme. The letter also states that the current upward trend in balances is distinct from the increase in balances observed from mid-2007 to late 2008, and again from mid-2011 to mid-2012. The increase in TARGET2 balances in those periods was rooted in the market stress and fragmentation that resulted from the financial and sovereign debt crises. 

European Payments Council publishes Guide for Adherence to the SEPA Credit Transfer scheme, the SEPA Instant Credit Transfer scheme and the SEPA Direct Debit schemes

The Guide, which was published on 19 January 2017, provides detailed guidelines as well as template application forms for applicants wishing to adhere to one or more of the EPC managed SEPA payment schemes.

European Banking Federation publishes response to the ECB Draft Guide on “fit and proper assessments”

The EBF commented that it was not clear how the ECB draft guide relates to the EBA/ESMA guidelines on the assessment of the suitability of members of the management body. The EBF also suggested that timelines should be harmonized along the lines of the procedure described in Directive 2007/44/EC (Antonveneta directive), stated that no assessment of key function holders should be provided by Guidelines and highlighted the importance of the proportionality principle meaning that the supervisory process of the ECB as well as the application of the suitability criteria should be commensurate with the size of the entity.

Commission publishes a list of Regulatory Technical Standards supplementing the Capital Requirements Regulation and Directive

The list details the state of play as of 17 January 2017, and provides links to each regulatory technical standard in the Official Journal. 

European Banking Authority reminds Competent Authorities of key deadlines and the Implementing Technical Standard to be used for running the 2017 supervisory benchmarking exercise of internal approaches

The EBA has recalled the key deadlines Competent Authorities should comply with for the submission of data needed to perform the 2017 supervisory benchmarking exercise. All EU institutions using internal approaches to calculate capital requirements will be subject to an assessment of their internal approaches and are, therefore, required to submit to their Competent Authorities risk measures remittance data and Low default portfolios data remittance by 11 April 2017. 

For further information please contact a member of the Financial Regulation team.

Date published: 07 Feb 2017