Financial Service Regulation and Compliance Bulletin - Banking March 2019

DOMESTIC

European Union (Bank Recovery and Resolution) Regulations 2019

The European Union (Bank Recovery and Resolution) Regulations 2019 were commenced in late March, which transpose Directive (EU) 2017/2399 of the European Parliament and of the Council amending Directive 2014/59/EU. These regulations effect changes in the European Union (Bank Recovery and Resolution) Regulations 2015 and the Companies Act 2014 to the hierarchy of unsecured debt instruments in the event of insolvency.

CBI publishes its Approach to Resolution for Banks and Investment Firms (First Edition)

The CBI has published the first edition of its Approach to Resolution for Banks and Investment Firms. The document contains a description of the resolution framework including how the Single Resolution Mechanism system operates. It also describes the CBI's general approach on resolution planning, minimum requirement for own funds and eligible liabilities (MREL).

EUROPEAN

ECB publishes Annual Report on Supervisory Activities 2018

The European Central Bank (ECB) has published its Annual Report on Supervisory Activities for 2018. The report sets out the key achievements of the banking sector during 2018 under the single supervisory mechanism (SSM), which include the reduction of legacy non-performing loans, increased profitability and enhanced resilience coming out of stress testing. The report outlines some of the key priorities for the year 2019 including credit risk, risk management, trading risk, asset valuations and Brexit.

EBA publishes Annual Report on Convergence of Supervisory Practices

The European Banking Authority (EBA) has published its Annual Report on Convergence of Supervisory Practices. The report outlines the EBA's assessment of the various national supervisory review and evaluation processes (SREP) and highlights key areas of focus to promote supervisory best practices across the single market.

The report concludes that national regulators have made good progress in implementing the SREP guidelines published by the EBA and accommodating EBA directions and recommendations. The key challenges identified by the report include converging capital adequacy assessments and determining institution-specific additional own funds requirements.

For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.

Date published: 16 April 2019