Domestic

Decisions on CRD 6 National Discretions published by the Department of Finance

Following its public consultation in 2025, the Department of Finance has published the decisions of the Minister for Finance on the national discretions in Directive 2024/1619 (CRD VI), which amends Directive 2013/36/EU (CRD IV).

Ireland has not yet published transposing legislation, notwithstanding that the transposition deadline (10 January 2026) for CRD VI has passed.

The national discretions include:

Discretion 1: Article 4a(4): It relates to the cooling-off period referred to in Article 4a(3)(b)(i) of CRD IV. It allows a national competent authority (NCA) to subject their members of staff and members of their governance bodies to a cooling-off period in the event of their hiring by direct competitors. Ireland will not exercise this discretion.

Discretion 2: Article 4a(5): This discretion relates to the cooling-off period referred to in Article 4a(3)(b)(i) of CRD IV. It allows an NCA to apply a shorter cooling-off period, of a minimum of three months, for members of staff directly involved in the supervision of credit institutions in circumstances where a longer cooling-off period would i) unduly restrict the ability of the NCA to hire necessary staff or ii) constitute a breach of fundamental rights under the ECHR or national labour law. Ireland will exercise this discretion.

Discretion 3: Article 48a(4): This discretion allows a Member State to apply to third-country branches authorised in the Member State (or to certain categories thereof) the same requirements that apply to EU credit institutions authorised under CRD IV, instead of the new requirements applicable to third-country branches that are set out in amended Title VI of CRD IV. Ireland will not exercise this discretion.

Discretion 4: Article 66(2): This discretion relates to Article 66(2)(b)(i) of CRD IV. It allows a Member State to set a higher maximum amount for periodic penalty payments to be applied per day of breach. The discretion also allows a Member State to apply periodic payments on a weekly or monthly basis instead of a daily basis.

Ireland will not exercise the discretion to set a higher maximum amount for periodic penalty payments to be applied per day of breach; however, it will exercise the discretion to apply periodic payments on a weekly or monthly basis.

Discretion 5: N/A - This discretion reference is incorrect in the outcome paper and in the feedback paper (it is a repeat of the discretion in Article 66(2).

Discretion 6: Article 76(1): This discretion allows the management bodies of small and non-complex credit institutions to review the strategies and policies for taking-up, monitoring, managing and mitigating relevant risks every two years (instead of reviewing and approving these strategies and policies every two years). Ireland will exercise this discretion.

Discretion 7: Article 91(1a): This discretion allows a Member State to, under certain conditions, permit the suitability assessment of members of the management body to take place after (instead of before) the newly appointed members have taken up their position. Ireland will not exercise this discretion.

European

ESAs publish Joint Guidelines on ESG stress testing

On 8 January 2026, the European Supervisory Authorities (ESAs) published a final report on joint guidelines on environmental, social, and governance (ESG) stress testing (the guidelines).

The guidelines provide competent authorities for the EU banking and insurance sectors with common standards on how to integrate ESG risks into their national supervisory stress testing activities, both when using established frameworks and when conducting complementary assessments of ESG risk impacts. They provide guidance on designing ESG-inclusive stress tests and outline the necessary organisational and governance arrangements.

The guidelines will apply from 1 January 2027.

EBA publishes final draft RTS to strengthen supervisory cooperation for third-country branches

On 8 January 2026 the European Banking Authority (EBA) published a final report on draft regulatory technical standards (RTS) on co-operation and colleges of supervisors for third country-branches.

The draft RTS are designed to enhance collaboration and information exchange between competent authorities supervising third-country branches in the EU and set out practical arrangements for organising colleges of supervisors in certain circumstances:

• Colleges of supervisors for class 1 third-country branches: The RTS detail how supervisory colleges should be established and function, including co-ordination of supervisory activities in both normal and emergency situations. An accompanying annex provides a mapping template to help competent authorities determine when a supervisory college is required under the Capital Requirements Directive.
• Cooperation outside the supervisory college context: For other third-country branches, supervisory colleges are not needed, and the draft RTS outline how authorities should co-operate and exchange information to facilitate their supervisory tasks in going concern and emergency situations.

The draft RTS will be submitted to the European Commission for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council of the EU before being published in the Official Journal of the EU.

EBA publishes final draft RTS on booking arrangements of third country branches

On 9 January 2026, the EBA published a final report on draft RTS specifying the booking arrangements that third-country branches must apply under CRD IV (as amended by CRD VI). The draft RTS are mandated under Article 48h of CRD IV.

The draft RTS:

• define the approach for identifying and recording assets and liabilities booked or originated by a third-country branch, including off-balance sheet items
• specify the minimum information necessary to keep a comprehensive and precise track record of booked or originated assets and liabilities
• specify the minimum risk data and associated risk management measures that must be maintained in the registry book for the activities of the branch

The draft RTS will be submitted to the European Commission for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council of the EU before being published in the Official Journal of the EU.

EBA publishes report on prudential consolidation

On 9 January 2026 the EBA published a report on prudential consolidation. The report was developed according to Article 18(10) of CRR. It recommends the European Commission consider further legislative adjustments to the prudential consolidation framework in CRR. It also clarifies several areas where recent EBA investigations have identified implementation challenges across EU credit institutions.

Recommendations include simplification of sub-consolidation requirements, improved alignment with accounting standards, and refinement of the definition of control, to ensure consistent interpretation and convergence across jurisdictions.

EBA publishes final report on guidelines on ancillary service undertakings

The EBA published the final report on guidelines on ancillary services undertakings specifying the criteria for the identification of activities referred to in Article 4(1)(18) of Regulations (EU) No 575/2013 (CRR) (the guidelines).

The guidelines were developed according to Article 4(5) of CRR. They set out clear, simple and consistent criteria for identifying activities falling within the definition of “ancillary services undertaking” under Article 4(1)(18) of the CRR, namely: (a) activities considered a “direct extension of banking”, (b) activities “ancillary to banking” and (c) “other similar activities”.

The guidelines also address innovative and digital business models, including fintech and technology-driven services, which may introduce new forms of ancillary risks within banking groups.

They will be translated into the official EU languages and published on the EBA’s website.

ECB delivers on 2024-2025 climate and nature plan and sets out further work for the future

On 16 January 2026 the European Central Bank (ECB) outlined its climate action success and plans for the future.

The ECB noted that it has further embedded climate and nature-related risks into its core work, by concluding its climate and nature plan 2024-2025. Over the past two years, the ECB has:

• refined its assessment of climate and nature related risks, including the way they inform policy decisions
• improved how it supervises banks and manages its own portfolios and operations

As a result, climate and nature-related risks are now more deeply integrated across relevant areas, for example monetary policy, data and risk assessment and banking sector resilience.

The ECB remains committed to embedding climate and nature into its work, and will intensify efforts going forward across three key policy areas:

• transition to a green economy by assessing banks’ prudential transition plans
• coping with the growing physical impacts of climate change on the economy and the financial system by strengthening macroeconomic analysis of banks’ capabilities to tackle challenges related to physical risk
• analysing the impact of nature-related risks and ecosystem degradation, including assessing the impact of water-related risks

EBA launches consultation on amendments to guidelines on the systemic risk buffer

On 29 January 2026, the EBA launched a consultation on draft amendments to its EBA guidelines on the appropriate subsets of sectoral exposures to which competent or designated authorities may apply a systemic risk buffer in accordance with Article 133(5)(f) of CRD IV.

The draft amendments aim to allow the systemic risk buffer measures to address both components of climate risk: transition risk and physical risk. Amendments are also based on lessons learned by national authorities that have already applied systemic risk buffer measures in the past.

The consultation period will close on 30 April 2026.

Date published: 26 February 2026

This publication provides an overview of certain legal and regulatory developments that may be of interest to certain entities. It does not purport to provide analysis of law or legal advice and is strictly for information purposes only.