1. Bank regulation
1.1 PRUDENTIAL REGULATION
a) General
(i) EU
EBA: Updated methodology on the regulatory and supervisory equivalence of non-EU countries
Status: Final
The EBA has published its updated methodology for the assessment of regulatory and supervisory frameworks of non-EU countries. The changes seek to reflect amendments to the revised CRR and CRD. The EBA states that it has also streamlined its questionnaire to improve the user experience.
Date of publication: 24/03/2025
(ii) International
BCBS: Basel III monitoring report
Status: Final
The BCBS has published its Basel III monitoring report. The report sets out trends in current bank capital and liquidity ratios and the impact of the fully phased-in Basel III framework, including the December 2017 finalisation of the Basel III reforms and the January 2019 finalisation of the market risk framework. It covers both large international active banks (Group 1) and other smaller banks (Group 2).
Date of publication: 26/03/2025
BCBS: Update on upcoming workstreams
Status: Final
The BCBS has published a press release providing an update on its workstreams. The BCBS states that it will publish by mid-2025 an update on the outcome of its work to prepare a suite of practical tools to support supervisors in their day-to-day work, taking into account the lessons learned from the 2023 banking turmoil. The BCBS has also committed to analysing recent developments and global practices on banks' information and communication technology risk management. The Committee plans to publish a range of practices report covering its findings in 2026. As part of the BCBS's work relating to non-bank financial intermediaries (NBFIs), the BCBS states that it will conduct a comprehensive investigation into the synthetic risk transfers from banks to NBFIs to provide an enhanced understanding of the risks and benefits of these products and the evolving nature of the transaction structures.
Date of publication: 13/03/2025
b) Solvency/Own funds issues
(i) EU
EC: Targeted consultation on the application of the market risk prudential framework
Status: Consultation
Deadline for the submission of comments: 22/04/2025
The EC has launched a consultation to help determine the best approach for the application of the EU's framework on market risk prudential requirements for banks. Last year, the Commission postponed by one year (until 1 January 2026) the date of fundamental review of the trading book (FRTB) application in the EU, in order to align implementation with other major global jurisdictions. Recent international developments indicate further possible delays in these jurisdictions, raising concerns on the international level playing field and the impact on EU banks. In this context, the Commission is consulting on possible action within its mandate under Article 461a of the capital requirements regulation around three potential options: (i) implementing the FRTB as currently laid down in the Banking package, from 1 January 2026; (ii) postponing the date of application by a further year (1 January 2027); or (iii) introducing temporary and targeted amendments to the market risk framework for up to three years. A list of possible temporary amendments is set out in the annex to the consultation. Combinations of the options or other alternatives could also be envisaged provided they are within the Commission's mandate. The Commission is empowered under Article 461a to adopt a Delegated Regulation by the end of June.
Date of publication: 24/03/2025
Status: Final
The EBA has published a final report on draft ITS amending the existing implementing regulation on the joint decision process for internal model authorisation under Articles 143(1), 151(9), 283 and 325az of the CRR. This final draft amending ITS is part of the first phase of the EBA roadmap for implementing the EU Banking Package. The key amendments include: (i) a revised scope for the use of internal models for regulatory purposes under CRR III, where the possibility of applying these models for operational risk has been removed. As a result, references to the Advanced Measurement Approach (AMA) have been deleted from the scope of the revised ITS; and (ii) updated references to the ITS and RTS on the functioning of supervisory colleges, reflecting changes in the revised supervisory colleges regulatory framework.
The draft ITS will be submitted to the Commission for endorsement following which the ITS will be subject to scrutiny by the EP and the Council before being published in the OJ.
Date of publication: 17/03/2025
c) Securitisation
(i) EU
Status: Final
The ESAs have published a report on the implementation and functioning of the Securitisation Regulation (Article 44). This report puts forward recommendations to strengthen the overall effectiveness of Europe's securitisation framework through simplification, while ensuring a high level of protection for investors and safeguarding financial stability. It identifies areas where the regulatory and supervisory framework can be enhanced, supporting the growth of robust and sound securitisation markets in Europe.
Date of publication: 31/03/2025
ESMA: Peer review report on the implementation of the STS securitisation requirements
Status: Final
ESMA has published a peer review report on NCAs' supervision of simple, transparent and standardised (STS) securitisations. The report looks into and provides recommendations on the supervisory approaches adopted by selected NCAs when supervising STS securitisation transactions and the activities of their originators, sponsors, and securitisation special purpose entities. The PRC recommends relevant NCAs scale up their approach to STS supervision, so that risks arising from these transactions are adequately identified, assessed, and addressed. NCAs are encouraged to continue monitoring the evolution of their STS markets and to adapt their supervisory approach and resource allocation as needed. This is said to be particularly relevant in light of the ongoing fundamental review of the securitisation regulatory framework, with the aim to revive the securitisation market in the EU. ESMA expects to carry out a follow-up assessment in the future to evaluate progress made against the recommendations and track developments in STS supervision across jurisdictions.
Date of publication: 27/03/2025
d) Liquidity
(i) EU
Status: Draft
The EC has published a proposal for a Regulation amending the CRR on prudential requirements for credit institutions as regards requirements for securities financing transactions under the NSFR. It aims to maintain the current transitional approach to the NSFR requirement which would otherwise come to an end. This requirement is part of the Basel III international standards and aims to ensure that banks have stable funding sources to fund their activities and reduce their dependency on short-term wholesale funding.
The current transitional treatment of this requirement has proven to be prudentially sound since the entry into application in mid-2021 and does not seem to have raised any financial stability concerns. Therefore, maintaining the current treatment, in line with the approach retained by other jurisdictions, may support the development of a liquid and attractive sovereign debt market and a deep securities financing transactions (SFT) market for EU collateral instruments.
Date of publication: 31/03/2025
e) Risk management/SREP/Pillar 2/Outsourcing/NPL
(i) EU
ECB: Updated FAQ on the SREP of tomorrow
Status: Final
The ECB has updated its FAQ on the so-called SREP of tomorrow. The FAQ explain why and with which aim the SREP has been reviewed and how the SREP and its implementation timeline have been changed. They also set out how the SREP decision templates have been improved, how the methodology for Pillar 2 requirements has been simplified and when this methodology will be implemented.
Date of publication: 11/03/2025
f) Cyber security
(i) EU
ESAs: Joint Committee update on risks and vulnerabilities in the EU financial system
Status: Final
The ESAs have updated their report on risks and vulnerabilities in the EU financial system, which focuses on the challenges linked to geopolitical tensions and cyber risks. They warn that growing geopolitical tensions and rising cyber risks present significant challenges to financial stability. These include trade disputes, rapidly shifting policies, ongoing international conflicts and the prospect of economic fragmentation which are reshaping global markets, requiring heightened vigilance and adaptability from supervisors and financial entities alike. The ESAs, therefore, emphasise the need for proactive risk management, stronger cyber resilience and a close monitoring of global financial linkages.
Date of publication: 31/03/2025
EC: Announcement that Member States should fully transpose DORA
Status: Final
The EC has announced that it has opened infringement procedures by sending a letter of formal notice to 13 Member States (Belgium, Bulgaria, Denmark, Greece, Spain, France, Latvia, Lithuania, Malta, Poland, Portugal, Romania and Slovenia) for failing to fully transpose the DORA Directive. Member States had to transpose the DORA Directive into national law by 17 January 2025. The Member States concerned now have two months to respond and to complete their transposition and notify their measures to the Commission. In the absence of a satisfactory response, the Commission may decide to issue a reasoned opinion, the second stage of the formal infringement procedure.
Date of publication: 27/03/2025
Status: Published in the OJ
Date of entry into force: 13/04/2025
The Commission Delegated Regulation (EU) 2025/420 supplementing DORA with regard to RTS to specify the criteria for determining the composition of the joint examination team ensuring a balanced participation of staff members from the ESAs and from the relevant competent authorities, their designation, tasks and working arrangements, has been published in the OJ.
Date of publication: 24/03/2025
Status: Adopted by the EC
The EC has adopted a draft Commission Delegated Regulation supplementing DORA with regard to RTS specifying the elements that a financial entity has to determine and assess when subcontracting ICT services supporting critical or important functions. Articles 1 and 2 establish the rules on proportionality and group application. Article 3 sets out rules on due diligence and risk assessment regarding the use of subcontractors supporting critical or important functions. Article 4 establishes the description and the conditions under which ICT services supporting a critical or important function may be subcontracted. Articles 5 and 6 contain the rules on material changes to subcontracting arrangements of ICT service supporting critical or important functions and the provisions on the termination of the contractual arrangement.
The Delegated Regulation will enter into force 20 days after its publication in the OJ.
Date of publication: 24/03/2025
Status: Final
Date of application: 19/05/2025
The ESAs have published translations of the joint Guidelines on the estimation of aggregated annual costs and losses caused by major ICT-related incidents. The Guidelines supplement the DORA which requires that financial entities report on request to their national competent authorities an estimation of aggregated annual costs and losses caused by major ICT-related incidents. The Guidelines indicate how those estimations should be arrived at and include a related reporting template.
Date of publication: 18/03/2025
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