EBA advises on the application of prudential requirements for credit and investment institutions

The European Banking Authority (EBA) published today an opinion addressed to the European Commission on the appropriateness of the rules governing the levels of application of prudential requirements for credit and investment institutions (Pillar 1 and 2), in particular the exemption regime. 

 

This Opinion follows a call for advice by the European Commission asking the EBA to look into whether the waivers under Pillar 1 and Pillar 2 are prudentially justified and whether they should be modified. To respond to this call, the EBA engaged directly with National Competent Authorities (NCAs) through a questionnaire and issued its Opinion based on 22 responses, covering over 6000 supervised institutions.

 

Overall, the EBA is of the opinion that the use of waivers should be reviewed in the future to allow for better alignment and also to take into account how and where they interact with each bank's recovery and resolution strategies, as well as the new intragroup financial support regime introduced by the Bank Recovery and resolution Directive (BRRD).

 

This Opinion will inform the Commission's review and final report which will be transmitted to the European Parliament and Council by end December 2014.

 

The EBA has delivered this Opinion based on Article 34(1) of its founding Regulation, as the levels of application of prudential requirements for credit and investment institutions fall within its area of competence.