EBA updates single rulebook Q&As: EBA has added five new items to its single rulebook Q&As. (Source: Single Rulebook Q&As)

EBA issues equivalence questionnaire: EBA has issued a questionnaire to guide its assessment of non-EU countries' equivalence with EU prudential supervision and regulatory requirements set by the CRR and fourth Capital Requirements Directive (CRD4). EBA will send the questionnaire to selected countries in several rounds. It will facilitate data collection and allow EBA to give the technical advice the Commission needs. (Source: EBA Assesses Regulatory Equivalence of Third Countries)

EBA updates on interest rate risk: EBA has updated its guidelines on technical aspects of the management of interest rate risk arising from non-trading (banking book) activities (IRRBB) under the supervisory review process. The first section is an updated version of the original text and provides enhanced high-level guidance on the management of IRRBB. The second section gives additional details on managing IRRBB. It also clarifies how institutions should take these aspects into account when assessing IRRBB in their Internal Capital Adequacy Assessment Process (ICAAP). This detailed guidance focuses thematically on five areas of interest risk assessment and control: scenarios and stress testing; measurement assumptions; methods for measuring interest rate risk; governance and identification of interest rate risk; and calculation and allocation of capital to interest rate risk. The guidelines will apply from 1 January 2016. (Source: EBA Updates Guidelines on IRRBB)

EBA publishes resolution guidelines: EBA has issued its final guidelines on the circumstances under which an institution shall be considered as "failing or likely to fail". The guidelines list all objective elements for determining whether an institution is failing or likely to fail.  Both supervisors and resolution authorities should use the guidelines, which set out different sets of procedural rules for each authorities, and establish the link between the supervisory review and evaluation process (SREP) and the "failing or likely to fail" determination. The guidelines will apply from 1 January 2016. (Source: EBA Publishes Guidelines on Triggers for Resolution)

EBA publishes DGS contribution guidelines: EBA has published its final guidelines on contributions to deposit guarantee schemes (DGSs) and on payment commitments under the new deposit guarantee scheme directive (DGSD). The guidelines:

  • set out methods adjusted to the risk profile of each institution for calculating ex-ante contributions to DGSs;
  • lay down calculation methods that include a set of core indicators capturing the main dimensions of the risk profile of credit institutions which will represent 75% of the risk assessment, giving the DGSs and relevant regulators discretion over the remaining 25%;
  • allow DGSs to authorise credit institutions to contribute up to 30% as secured commitments to pay upon request;
  • allow credit institutions to make payment commitments via two types of arrangements - a Payment Commitment Arrangement and a Financial Collateral Arrangement;
  • provide for criteria on the eligibility and management of collateral. Assets will be eligible for collateral only if they are of sufficiently low risk;
  • provide that DGSs should limit their exposure to debt, the value of which has a strong link to events where the DGS would have to use its funds; and
  • introduce principles ensuring that the prudential treatment of payment commitments does not encourage procyclicality by incentivising payment commitments over cash contributions.

Member States have to implement the DGSD by 3 July. DGSs and designated authorities should implement the guidelines by 31 December. (Source: EBA Publishes Guidelines on Contributions and Payment Commitments to Deposit Guarantee Scheme)

EBA finalises capital instruments report: EBA has published its final report on monitoring Additional Tier 1 (AT1) capital instruments. (Source: EBA Publishes Final Version of its Updated Report on the Monitoring of Additional Tier 1 Capital Instruments)

EBA issues MCD guidelines: EBA has published two sets of guidelines on the Mortgage Credit Directive (MCD):

  • on the creditworthiness assessment: these guidelines set out how to verify consumers' income and assess what they can afford, documenting and keeping information and preventing misrepresentation in information, and how to cater for potential negative scenarios in the future; and
  • on arrears and foreclosure: these guidelines look at how to detect payment difficulties at an early stage and how to deal with them.

These guidelines will replace the current, pre-MCD, guidelines from 21 March 2016. (Source: EBA Issues MCD Guidelines)