The EU Council has adopted reforms to CRD IV and the BRRD, as approved by the European Parliament in April.
The package includes:
- a leverage ratio requirement for all institutions and a leverage ratio buffer for all ‘global systematically important’ institutions;
- a new stable funding requirement;
- a new market risk framework for reporting, and simplified liquidity rules for small non-complex banks;
- a requirement for third-country institutions to have an EU intermediate parent undertaking;
- a new total loss absorbing capacity requirement for all ‘global systematically important’ institutions;
- enhanced minimum requirement for own funds; and
- a new moratorium power for the resolution authority; and
- targeted measures to cater for incentives in public infrastructure and SMEs and a credit risk framework for the disposal of non-performing loans.
The package will be published in June and enter into force 20 days later. Most of the new rules will apply from mid 2021.