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As much as “a world in flux” seems to be a persistent theme given global events of the last 18 months, the descriptor seems equally applicable to developments in the realm of corporate social responsibility (CSR) and environmental, social, and governance (ESG) factors. The push-pull of regulatory momentum (as proposals are proffered, then critiqued, then modified) coupled with the sluggishness served up by a pandemic that has slowed down almost everything might tempt compliance teams and others working on CSR and ESG messaging to shelve it for now.
A few real-world examples
<p><span>The European Banking Authority (EBA) published today its final draft Regulatory Technical Standards (RTS) on own funds and eligible liabilities. Since their entry into force, the RTS on own funds have significantly enhanced regulatory harmonisation of prudential rules and contributed to strengthening the quality of regulatory capital. With the revised Capital Requirements Regulation (CRR) introducing new criteria and requirements for eligible liabilities, these amended RTS capture several aspects of eligible liabilities as well as the changes to the own funds framework.</span></p>
EBA Consults On Draft Technical Standards Specifying How To Identify The Appropriate Risk Weights And Conditions When Assessing Minimum LGD Values For Exposures Secured By Immovable Property Date
29/04/2021
The European Banking Authority (EBA) published today a consultation paper on a draft Regulatory Technical Standards specifying the types of factors to be considered for the assessment of appropriateness of risk weights and the conditions to be taken into account for the assessment of appropriateness of minimum loss given default (LGD) values for exposures secured by immovable property. The consultation runs until 29 July 2021.
The relevant authority, as designated by the Member State, may set higher risk weights or impose stricter criteria on risk weights, or increase the minimum LGD values when the following two conditions are met:
ESG investing: SFDR frustrations Apr 26, 2021 By Funds Europe
The EU’s Sustainable Finance Disclosure Regulation (SFDR) came into force in March. It has been said to pave the way for greater transparency in ESG – or environmental, social, and governance – investing, but frustrations remain.
For Funds Europe’s April issue, we learned that transparency in the funds industry is expected to increase over the next two years, as funds have to categorise themselves depending how ESG-focused they are, if at all. As with all regulation, however, SFDR’s implementation is a process.
The second level of SFDR, a crucial part of the EU’s sustainability agenda, is expected to come into play in June 2023, having been postponed. This will include the Regulatory Technical Standards, a further step designed to redefine ESG investing.
EBA Published Final Draft Technical Standards Specifying The Methods Of Prudential Consolidation Date
15/04/2021
The European Banking Authority (EBA) published today its final draft Regulatory Technical Standards (RTS) specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR). The aim of these draft RTS is to ensure that the appropriate method of prudential consolidation is applied for the calculation of the CRR requirements on a consolidated basis. Compared to the Consultation Paper, the final draft RTS have been revised also to reflect the amendments introduced as part of the Risk Reduction Measures Package adopted by the European legislators.