DOMESTIC:

Competition and Consumer Protection Commission has published its Mortgages Options Paper

Following a request from the Irish Government the Competition and Consumer Protection Commission (CCPC) has published its Mortgages Options Paper. The paper examines the mortgage market based on consumer research that was carried out, the barriers and features of the market affecting consumers and the calculation of mortgage interest rates. Based on their analysis the CCPC provided options to improve the level of competition in the mortgage market and to provide more choices for consumers.

Central Bank launches consultation on the Implementation of Competent Authority Options and Discretions in the European Union (Capital Requirements) Regulations 2014 and Capital Requirements Regulation (EU) No 575/2013

The Central Bank (CBI) has launched a consultation in order to update its 2014 Implementation Notice in relation to the exercise of the discretions and options provided by the European Union (Capital Requirements) Regulations 2014 (CRD Regulations) and the Capital Requirements Regulation (CRR). The Consultation discusses the options and discretions extended in relation to the transitional arrangements, the area of own funds, the standardized approach to credit risk, liquidity, corporate governance, the Pillar 3 requirements applicable to subsidiaries and the applicability of certain provisions to MiFID firms. The consultation will run until 4 August 2017.

Senad Éireann publishes the National Housing Co-operative Bill 2017

The Bill proposes the creation of an entity called the 'National Housing Co-operative Society' which will be given the mandate and powers to acquire, manage, rent or sell distressed mortgages so that the occupants of houses can move from the status of distressed mortgagor by means of mortgage to “rent and mortgage”. The Explanatory Memorandum sets out that the funding for the entity would be raised via a 20-year secured property bond. The Bill is currently at the Second Stage of the legislative process.

Central Bank of Ireland publishes economic letter on "The impact of the Extended Asset Purchasing Program (EAPP) on Irish resident banks"

The letter examines the approach of Irish resident banks to the purchase of assets following the increases in capital and liquidity. Following a review of a dataset on the EAPP purchases (the EAPP allows banks to purchase euro-denominated, investment-grade securities issued by euro area governments and European institutions) and banks' holdings, it was found that banks have not changed their purchasing trends and it was concluded that they are constrained by external factors.

EUROPEAN:

European Banking Authority publishes its 2016 Annual Report

The European Banking Authorities (EBA) Annual Report indicated that in 2016 their main accomplishments were the substantial completion of the Single Rulebook applicable to the banking sector and the active support to complete of the Basel III package, comprising of Directive 2013/36/EU (CRD IV) and the CRR. The EBA also highlighted that throughout 2016 they continued to enhance their monitoring of activities pursuant to the Single Rulebook including on own funds, remuneration practices and significant risk transfers in securitisations.

Andrea Enria, Chairperson of the EBA, flagged the review of the European Supervisory Authorities as an important issue moving forward especially in relation to the funding structure of the EBA. He also noted that the Payment Services Directive II (PSD II) and the UK's decision to leave the European Union as challenges that the EBA will tackle in 2017.

European Banking Authority updates final guidelines on Disclosure Requirements pursuant to the CRR

The EBA has published updated guidelines on disclosure requirements which are compliant with the reporting requirements under Part Eight of the CRR. The Guidelines act as specifications of existing disclosure requirements under the CRR and include templates for disclosure formats, tables for disclosure guidance and textual guidance items. The guidelines apply to institutions required to comply with some, or all, of the disclosure requirements in Part Eight of the CRR and will not waive, contradict or supersede any of the CRR disclosure requirements.

European Banking Authority publishes guidelines on Liquidity Coverage Ratio Disclosure

The Guidelines on the Liquidity Coverage Ratio (LCR) disclosure framework for risk management have been put in place to complement the disclosure of liquidity risk management under Article 435 of the CRR. The Guidelines outline the information on LCR which is required to be disclosed within the key ratios and figures for the purpose of Article 435. These Guidelines apply to credit institutions which have to comply with the Guidelines on Disclosure Requirements under Part 8 of the CRR.

European Banking Authority publishes 2018 EU-wide Stress Test Methodology

The EU-wide stress test methodology and templates for 2018 have been published in draft form for discussion within the industry. The stress testing exercise will cover about 70% of the banking sector in the euro area, as well as non-Euro Member States and Norway, and includes all relevant risk areas. The methodology intends to incorporate the IFRS 9 accounting standards for banks who will be applying them. The final methodology will be published when the exercise is launched at the beginning of 2018.

European Securities and Markets Authority publishes framework for Mandatory Benchmark Contributions

Under the Benchmarks Regulation National Competent Authorities (NCAs) can, in certain circumstances, require supervised entities to contribute input data to critical benchmarks. The size of a supervised entity's actual and potential participation in the market that the benchmark intends to measure will be the basis for the selection by the NCA. The framework published aims to promote the convergence and supervision of specific types of critical benchmarks.

European Central Bank launches consultation to review the ECB Regulation on Supervisory Fees

The consultation is aimed at assessing possible improvements that could be made to the Regulation which levies supervisory fees from banks supervised within the Single Supervisory Mechanism (SSM) based on the supervised entity's status as either a significant or less significant bank. The European Central Bank (ECB) has also issued Questions and Answers on the review. The consultation will run until 20 July 2017.

European Banking Authority launches discussion paper on the Treatment of Structural FX

Article 352(2) of the CRR provides for the structural FX provision which has become subject to various interpretations and applications by Member States and banks. Concerns exist that the varied application may lead to significant differences in capital requirements across institutions with similar exposures. As a result a discussion paper was launched with the aim of achieving a harmonised approach to the structural FX provision. The paper looks at the rationale of the provision as well as broader issues such as the nature of FX risk. Comments on the paper will be accepted until 22 September 2017.

European Banking Authority issues revised list of validation rules in Implementing Technical Standards under the Capital Requirements Legislation

The Implementing Technical Standards (ITS) on supervisory reporting, which were issued pursuant to the Capital Requirements Legislation, consist of a revised list of validation rules which have been issued in order to highlight rules which have been deactivated as they were incorrect or due to the fact that they have been triggering IT problems.

Commission Delegated Regulation (EU) 2017/979 of 2 March 2017 and Commission Implementing Regulation (EU) 2017/954 of 6 June 2017 and Commission Implementing Regulation (EU) 2017/1147 of 28 June 2017 are published in the official journal

Commission Delegated Regulation (EU) 2017/979 of 2 March 2017 amending Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to the list of exempted entities was published in the official journal and came into effect on 30 June 2017.

  • Commission Implementing Regulation (EU) 2017/954 of 6 June 2017 on the extension of the transitional periods related to own funds requirements for exposures to central counterparties set out in Regulations (EU) No 575/2013 and (EU) No 648/2012 of the European Parliament and of the Council was published in the official journal and came into effect on 10 June 2017.
  • Commission Implementing Regulation (EU) 2017/1147, amending Implementing Regulation (EU) 2016/1368, establishing a list of critical benchmarks used in financial markets pursuant to the Benchmarks Regulation (EU) 2016/1011 was published in the official journal and entered into effect on 30 June 2017. The Regulation added EONIA, the reference interest rate for interest rate swaps in euro, to the list of critical benchmarks.

European Banking Authority publishes questions and answers in relation to the CRR (EU) No 575/2013 in the Single Rulebook Q&A on the following topics:

  • Speculative immovable property financing (Article 4);
  • Short positions in financial institution capital instruments (Article 45);
  • Use of bona fide estimates for the determination of the size of a corporation (Article 153 and 162);
  • CVA Standardised Method for Securities Financing Transactions (SFTs) (Article 384);
  • Reporting of assets lending on an unsecured basis (Article 425);
  • Written Credit Derivatives Add-On MR/NR Netting (Article 429a); and
  • Contingent liabilities within the Merchant Services Industry (Annex 1).

European Banking Authority publishes question and answer in relation to the CRD 2013/36/EU in the Single Rulebook Q&A on the following topic:

  • O-SII buffer / Capital conservation buffer application (Article 131);
  • Systemic risk buffer requirement calculation (Article 133); and
  • Calculation of the Countercyclical Capital Buffer (Article 140).

European Banking Authority publishes a question and answer in relation to the Bank Recovery and Resolution Directive 2014/59/EU in the Single Rulebook Q&A on the following topic:

Private ownership of a bridge institution or an asset management tool (Article 40 and 42).