Welcome to the June edition of the EMA Financial Services Risk & Regulatory Insight Centre monthly update. Articles this month from the European regulators and international standard setters include:
- The Basel Committee work programme and the shift of emphasis from policy development to consistent implementation;
- The European Council response to CRR 2 and BRRD 2;
- The EBA and ESMA statement on the treatment of retail holdings of bank debt subject to bail in BRRD;
- The European Commission’s proposals on sustainable finance.
There have been further updates on MiFID II this month as the European Parliament continues to react to market implementation issues – policymakers are taking an active role in adjusting MiFID II where necessary.
In addition to our European perspectives, in the UK the PRA and the Bank of England have finalised a number of policies following earlier consultation papers. We feature this month the finalisation of the Bank of England’s principles for the valuation capabilities of banks subject to a resolution strategy, where a number of important changes have been made as a result of the consultation process. In addition, the Bank of England and the PRA have finalised, with only minor changes, their policies on:
- Banks’ preparedness for valuation to support resolution (consulted upon in August 2017 and taking effect from January 2021) – further insights below;
- Setting internal MREL (minimum requirement for own funds and eligible liabilities) within banking groups (consulted upon in October 2017 and taking effect for relevant subsidiaries of G-SIBs from January 2019, and for relevant subsidiaries of other banking groups from January 2020);
- Banks’ reporting of their regulatory capital and other debt eligible to count towards meeting their MREL requirements (consulted upon in January 2018 and taking effect from January 2019); and
- Algorithmic trading (consulted upon in February 2018 and taking effect from end-June this year).