EBA acknowledges Commission’s decision on equivalence for Serbia and South Korea

The European Banking Authority (EBA) acknowledged today the EU Commission’s decision to consider the supervisory and regulatory framework applicable to credit institutions in Serbia and South Korea as equivalent to that applied in the Union. The Commission’s decision follows the EBA’s assessment of non-EU countries' equivalence with the EU prudential supervision and regulatory requirements. In its Opinion, in November 2018, the EBA concluded that the supervisory and regulatory framework applicable to credit institutions in Serbia and South Korea can be regarded as equivalent to that applied in the Union.

According to the Capital Requirements Regulation (CRR), under well-defined conditions, certain categories of exposures to entities located in countries outside the EU can benefit from the same preferential treatment applied to EU Member States' exposures in terms of capital requirements. This would imply that EU credit institutions can apply preferential risk weights to relevant exposures to entities located in those countries. In particular, such preferential treatment is only available if and when the European Commission adopts an Implementing Decision determining that the country's prudential supervisory and regulatory requirements are at least equivalent to those applied in the EU.

Against this background, and within its mandate to promote supervisory convergence, the EBA was asked by the European Commission to provide technical advice on the equivalence of the legal and supervisory regimes in countries outside the EU.

Following this assessment, the EBA provided its Opinion to the Commission in November 2018 that the supervisory and regulatory framework applicable to credit institutions as documented in domestic laws and regulations in Serbia and South Korea could be regarded as equivalent to those applied in the Union.

As requested by the Commission, the EBA published today this Opinion after the Commission's approval and publication of the related Decision on Equivalence.