Regulation (EU) 2019/876 (Text with EEA relevance.)

What it is

The Committee on Economic and Monetary Affairs adopted the report by Peter SIMON (S&D, DE) on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 575/2013 as regards the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements and amending Regulation (EU) No 648/2012. The committee responsible recommended that the European Parliament’s position adopted at first reading under the ordinary legislative procedure should amend the Commission proposal as follows. The proposal to amend Regulation (EU) No 575/2013 (the Capital Requirements Regulation or CRR) provides for a binding leverage ratio , designed to prevent institutions from excessive leverage, and a binding net stable funding ratio. It strengthens risk-sensitive capital requirements in particular in the area of market risk, counterparty credit risk, and for exposures to central counterparties (CCPs). In addition, it requires for Global Systemically Important Institutions (G-SIIs) to hold minimum levels of capital and other instruments which bear losses in resolution. This requirement, known as 'Total Loss-Absorbing Capacity' or TLAC), will be integrated into the existing MREL (Minimum Requirement for own funds and Eligible Liabilities) system, which is applicable to all banks. The European Parliament adopted by 490 votes to 52, with 11 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 575/2013 as regards the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements and amending Regulation (EU) No 648/2012. The European Parliament adopted its position at first reading in accordance with the ordinary legislative procedure. The proposal to amend Regulation (EU) No 575/2013 of the European Parliament and of the Council on capital requirements (CRR) provides for a binding leverage ratio, designed to prevent institutions from excessive leverage, and a binding net stable funding ratio. The amendments to the Commission's proposal place particular emphasis on: - the introduction of a more precise definition of small, non-complex institutions necessary for targeted simplifications of requirements with respect to the application of the principle of proportionality and the possibility for Member States to use their discretion to bring the threshold in line with domestic circumstances and adjust it downwards, as appropriate; - the need to apply, in addition to the criterion of the size of an establishment, additional qualitative criteria to ensure that an institution is only considered to be small and non-complex, and can benefit from more proportionate rules, if it fulfils all the relevant criteria; - the possibility for…

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