European Banking Authority (EBA)
Not waiving but drowning: EU banks face capital traps
Council and some MEPs try to kill cross-border capital and liquidity waivers in CRR II
EU regulators urged to give guarantees on Brexit transition
UK banks and insurers want legal protection in case a political deal breaks down
VM rules sound death knell for forex swaps in Europe
Market participants claim instrument was a “mythical creature” that never really existed
FRTB, CCAR and bonus caps for prop traders
The week on Risk.net, December 16-22, 2017
EBA steps up bonus cap pressure on Dutch prop traders
Dutch regulator told to “pay attention” to pay rules EC plans to scrap for non-banks
EU shuts door on foreign electronic access providers
US FCMs could be barred from providing direct electronic access as member states bow to Esma
Unlucky for some: Europe’s war on 13 Dutch prop traders
Liquidity hit feared as FlowTraders, IMC, Optiver and other non-banks face bank-style capital rules
Doubts cast on Europe’s IFRS 9 transition period
Dynamic transition viewed as too complicated for banks to use or investors to understand
Definition of credit spread risk unclear in EBA proposals
Market participants say banking book guidelines will be difficult to follow
EBA highlights ‘cliff-edge Brexit’, cyber and NPL challenges
High NPL levels and low profits also challenge European banking sector, EBA report says
EC backs forex forward margin exemption
Need for change is “undisputed”, official says – but short-term relief expected to come via forbearance
EBA and Eiopa confirm changes to VM rule for forwards
Bodies aim to align EU with other jurisdictions – hinting at end of unpopular rule
CCPs say central bank access needed to avoid liquidity crisis
Uniform access to deposit accounts and overnight liquidity vital, say market participants
ECB tells IMA banks to apply before rules are complete
Dealers criticise “unreasonable” timetable for FRTB model approvals, revealed in September call
Eurex urges more regulators to endorse VM capital savings
CME, Ice and LCH treat variation margin as settlement; Eurex awaits further guidance
Banks say Europe’s CVA proxy-spread plans lack flexibility
Dealers welcome EBA proposals but say limited number of eligible counterparties means few benefits
FRTB: proxy risk factors may trigger model failures
Swapping non-modellable risk factors for proxies may make it harder to pass P&L attribution test
EBA warns of wide differences in fintech regulation
Third of European fintech firms are completely unregulated, survey finds
EU prop firm capital crunch could hit market liquidity
Traders claim they would be put out of business by bank-style capital rules
Prop traders rebuffed by FCA on capital modelling
Non-banks may have to use tougher market risk approach than bank competitors
EBA urges European banks to step up IFRS 9 preparations
Banks not yet in testing phase face 32 basis point extra capital hit, report finds
No safety net: EU urged to accelerate bail-in buffers
Without MREL or TLAC, governments are at mercy of private buyers for failed banks
Commodities firms fear EBA’s inappropriate capital charges
Energy lobbying overlooked as proposed regime threatens vigorous demands
Basel capital floor faces credit risk eclipse
Impact of capital floor depends on new credit risk rules and changes to treatment of provisions