The European Parliament is to consider the proposed Regulation amending the CRR in its plenary session on 17-18 June. Meanwhile, the ECB has published its opinion on the proposals, which are aimed at addressing some of the challenges resulting from Covid-19. The ECB notes how it has used the flexibilities in the supervisory framework to support credit institutions, and also notes the actions of the Basel Committee and the EBA. So it fully supports the Commission’s initiative to increase lending capacity while ensuring credit institutions remain resilient. It makes several specific observations on the detail of the proposals, including:
- supporting the use of the extended Basel III implementation timeline;
- supporting the temporary extension of specific treatment of non-performing exposures that are appropriately secured;
- noting the impact of the change to the recalibration mechanism; and
- welcoming the additional flexibilities in the proposal for assessing the results of back-testing.