Banking and finance regulatory news, December 2020

Article 325(9) mandates the EBA to develop draft RTS to specify how institutions should calculate the own funds requirements for non-trading book positions that are subject to FX risk or commodity risk in accordance with the alternative standardised approach (SA) and the alternative internal model approach (IMA). In addition, Articles 325bf(4) and 325bg(9) mandate the EBA to draft RTS to specify how institutions are to calculate the changes in hypothetical profit and loss (HPL), actual profit and loss (APL) and risk theoretical profit and loss (RTPL) for the purpose of the back-testing and P&L attribution requirements.

The EBA proposes that the draft Delegated Regulation should enter into force twenty days after its publication in the Official Journal of the EU (OJ).

The EBA will submit the final draft RTS to the European Commission for adoption.

SRB 2021 work programme and multi-annual programme

The Single Resolution Board (SRB) has published a document[19] containing its work programme for 2021 and its multi-annual programme, covering the period 2021-23.

SRF: Eurogroup statement on early introduction of common backstop

The Eurogroup has announced[20] that it has decided to proceed with the early introduction of the backstop to the Single Resolution Fund (SRF) with the aim of its entry into force by the beginning of 2022.

BRRD II: European Commission notice on interpretation

A European Commission notice[21] relating to the interpretation of certain legal provisions of the revised bank resolution framework in the BRRD (in reply to questions raised by member states’ authorities) has published in the OJ. The notice also considers the interaction of certain aspects of BRRD II with the CRR, CRD IV and the Single Resolution Mechanism Regulation.

Mitigating COVID-19 impacts: BCBS oversight body commits to coordinated approach and endorses future direction of work

The Basel Committee on Banking Supervision (BCBS) has published a press release[22] announcing that the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the BCBS, has committed to a coordinated approach to mitigating COVID-19 risks to the global banking system and endorsed the future direction of BCBS work.

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