Proposal for a Regulation amending Regulation (EU) No 575/2013 and Directive 2014/59/EU as regards the prudential treatment of global systemically important institution groups with a multiple point of entry resolution strategy and a methodology for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities

Author (Corporate)
Series Details COM (2021) 665
Publication Date 27/10/2021
Content Type

Summary:

Legislative initiative tabled by the European Commission on 27 October 2021, introducing amendments to Regulation (EU) No 575/2013 and Directive 2014/59/EU concerning the prudential treatment of global systemically important institution groups with a multiple point of entry resolution strategy and a methodology for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities. This is a text with EEA relevance.

Further information:

Regulation (EU) No 575/2013 - also known as the Capital Requirements Regulation (CRR) - established a single set of harmonised prudential rules, which banks throughout the European Union (EU) must respect. Directive 2014/59/EU established common rules in the European Union (EU) for the recovery and restructuring of failing banks.

The so-called Daisy Chain proposal was put forward by the European Commission on 27 October 2021, as part of the so-called 2021 Banking Package. Its aim was to amend the CRR in aspects relating to resolution by:

  • incorporating a dedicated treatment for the indirect subscription of instruments eligible for internal minimum requirement for own funds and eligible liabilities (MREL);
  • further aligning the treatment of global systemically important institution (G-SII) groups with a Multiple Point of Entry (MPE) resolution strategy with the treatment outlined in the FSB’s international Total Loss-absorbing Capacity Term Sheet;
  • clarifying the eligibility of instruments in the context of the internal TLAC.

Member State representatives adopted a general approach for this file on behalf of the Council of the European Union on 21 December 2021. The European Parliament adopted its negotiating position in February 2022. An informal agreement between the co-legislators on a compromise text for this file was reached on 28 April.

Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2021:665:FIN
Related Links
Official
European Parliament: Legislative Observatory: Procedure File for Proposal on Amendments to the Capital Requirements Regulation in the area of resolution (“daisy chain” proposal) (2021/0343(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2021/0343(COD)
European Parliament: Legislative Train Schedule: Review of the Capital Requirements Regulation in the area of Resolution https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-crd-crr-review-3
European Commission: Press Release, 27/10/2021: Banking Package 2021: new EU rules to strengthen banks' resilience and better prepare for the future https://ec.europa.eu/commission/presscorner/detail/en/ip_21_5401
European Commission: Questions and Answers on the Banking Package 2021 (27 October 2021) https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_5386
Council of the European Union: Press Release, 21/12/2021: Daisy Chain: member states ready to negotiate with European Parliament https://www.consilium.europa.eu/en/press/press-releases/2021/12/21/daisy-chain-member-states-ready-to-negotiate-with-european-parliament/
Council of the European Union: Press Release, 28/04/2022: Daisy chains: provisional agreement on a revised bank resolution framework https://www.consilium.europa.eu/en/press/press-releases/2022/04/28/daisy-chain-provisional-agreement-on-a-revised-bank-resolution-framework-which-will-help-ensure-that-banks-remain-resilient-and-capable-of-withstanding-future-shocks/

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