Diario Oficial de la Unión Europea del 26/4/2022 - Sección Legislación
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Source: Diario Oficial de la Unión Europea - Sección Legislación
L 123/2
EN
Official Journal of the European Union
26.4.2022
4
The Basel Committee on Banking Supervision BCBS has published Guidelines on the identification and management of step-in risk 4 which include several indicators that should be used by institutions in identifying which entities can give rise to step-in risk. According to the BCBS Guidelines, step-in risk is the risk that an institution decides to provide financial support to an unconsolidated entity, that is not a fully or proportionately consolidated entity, that is facing stress, in the absence of, or in excess of, any contractual obligations to provide such support. Pursuant to the BCBS Guidelines, where an institution identifies that there is significant step-in risk, it needs to determine the appropriate measures based on the nature and extent of the anticipated step-in support in each case. Those measures encompass, among others, the inclusion of the entities concerned in the regulatory scope of consolidation. In line with the BCBS Guidelines, several indicators should be considered by institutions and competent authorities to conclude whether certain undertakings should be fully or proportionally consolidated pursuant to Article 185, Article 186, point a, or Article 188 of Regulation EU No 575/2013, as applicable, taking into account the risk of step-in these undertakings may pose to an institution. Nevertheless, institutions should also consider alternative measures to address step-in risk under their risk management procedures and internal capital adequacy assessment process ICAAP. In addition, competent authorities may consider other measures to address the potential risk posed by those undertakings under the supervisory review and evaluation processes SREP. In the context of the large exposures framework, the European Banking Authority EBA has also issued guidelines on limits on exposures to shadow banking entities that carry out banking-like activities outside a regulatory framework 5, which specify the methodology that should be used by institutions to set limits, as part of their internal processes, on their individual and aggregate exposures to shadow banking entities.
5
In particular, in order to determine whether full or proportional consolidation is needed pursuant to Article 188 of Regulation EU No 575/2013 in the case of subsidiaries or undertakings in which an institution holds a participation where that subsidiary or undertaking is not an institution, financial institution or ancillary services undertaking, and where there is a substantial step-in risk and provided that the undertaking is not an insurance or reinsurance undertaking, or an insurance holding undertaking, among others, competent authorities should be expected to scrutinise, at a minimum, certain categories of undertakings such as special purpose entities that do not qualify as securitisation special purpose entities as defined in Article 2, point 2, of Regulation EU 2017/2402 of the European Parliament and of the Council 6, for which the conditions for the transfer of significant credit risk set out in Article 244 of Regulation EU No 575/2013 are applicable, as well as those undertakings performing any of the activities referred to in Article 891, point b, of Regulation EU No 575/2013.
6
In order to ensure consistency with the own funds framework under Regulation EU No 575/2013 and to avoid the recognition of undue capital benefits, in those cases where consolidation is required pursuant to Article 183 to 6
or Article 188 of Regulation EU No 575/2013, the inclusion in the consolidated own funds of the amounts of Common Equity Tier 1 items and of the Additional Tier 1 and Tier 2 capital instruments issued by the undertakings included in the prudential scope of consolidation and owned by persons other than such undertakings, as well as the related share premium accounts, should also be based on Articles 81 to 88 of that Regulation.
7
This Regulation is based on the draft regulatory technical standards submitted to the Commission by the EBA.
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The EBA has conducted open public consultations on the draft regulatory technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the advice of the Banking Stakeholder Group established in accordance with Article 37 of Regulation EU No 1093/2010 of the European Parliament and of the Council 7,
4 Guidelines of the Basel Committee on Banking Supervision on the identification and management of step-in risk, Basel, October 2017.
5 EBA Guidelines on Limits on exposures to shadow banking entities which carry out banking activities outside a regulated framework under Article 3952 of Regulation EU No 575/2013, 3 June 2016, EBA/GL/2015/20.
6 Regulation EU 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations EC No 1060/2009 and EU No 648/2012 OJ L 347, 28.12.2017, p. 35.
7 Regulation EU No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority European Banking Authority, amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC OJ L 331, 15.12.2010, p. 12.
