Banking and finance regulatory news, 15 March 2021

Contents

• Download the full regulatory news bulletin
• Open banking: CMA consultation on future governance
• EU CRR: Delegated Regulation on alternative standardised approach for market risk
• CRD: EBA consults on draft guidelines on common assessment methodology for credit institution authorisation
• EBA Consumer Trends Report for 2020/2021
• COVID-19: European Parliament report on unwinding of policy support for banks

Open banking: CMA consultation on future governance

The Competition and Markets Authority (CMA) is consulting on the future governance of open banking.

In order to implement open banking, the CMA required the nine largest current account providers in Britain and Northern Ireland to create and pay for an implementation entity – known now as the Open Banking Implementation Entity (OBIE) – and to appoint an implementation Trustee, approved by the CMA, to oversee the process. The implementation phase of open banking is nearing completion (end of 2021) and the CMA is now consulting on what arrangements should be put in place for its governance in the next phase of development.

UK Finance has submitted proposals that involve creating a new body, with a more broadly-based funding and governance model, to succeed the OBIE. It is proposed that this body would take over the OBIE's functions, other than compliance monitoring, which will be handled separately. The CMA considers these proposals as part of its consultation.

Stakeholders are being consulted on three main areas:

• whether the successor organisation proposed by UK Finance proposals will be: independent and accountable; adequately funded; dedicated to serving the customer's interests; and robust and sustainable;
• what compliance monitoring arrangements will it be necessary for the CMA to put in place going forward; and
• what transitional arrangements should be adopted and when should the process begin.

The consultation closes on 29 March 2021.

EU CRR: Delegated Regulation on alternative standardised approach for market risk

Commission Delegated Regulation (EU) 2021/424 amending the Capital Requirements Regulation (CRR) with regard to the alternative standardised approach for market risk has been published in the Official Journal of the EU. The update is necessary following revisions to the CRR by CRR II.

The Delegated Regulation will enter into force on 30 March 2021. It will apply from 30 September 2021.

CRD: EBA consults on draft guidelines on common assessment methodology for credit institution authorisation

The European Banking Authority (EBA) has published a consultation paper on draft guidelines on a common assessment methodology (CAM) for granting authorisation as a credit institution under Article 8(5) of the EU Capital Requirements Directive (CRD).

Article 8(5) requires the EBA to specify a CAM for granting authorisations in accordance with the CRD, with a view to fostering supervisory convergence across the EU. The draft guidelines are addressed to competent authorities across the EU in charge of granting credit institution authorisation. They cover the authorisation requirements set out in Articles 10 to 14 of the CRD.

The EBA will hold a public hearing on the draft guidelines on 22 April 2021. Comments can be made on the proposals until 10 June 2021. The draft guidelines state that they will apply from 1 March 2022.

EBA Consumer Trends Report for 2020/2021

The EBA has published its Consumer Trends Report for 2020/2021. The report identifyies topical issues including irresponsible lending, creditworthiness assessments, and digitalisation, which the EBA has recently addressed. Other topics are covered, such as selling practices and access to bank accounts, which the EBA has recently started to work on. The report also explains the measures the EBA has taken to mitigate the impact of the COVID-19 pandemic on consumers.

COVID-19: European Parliament report on unwinding of policy support for banks

The European Parliament has published an analysis report on when and how to unwind COVID-19 support measures for the banking system. Commissioned by the Committee on Economic and Monetary Affairs, it examines regulatory measures and supervisory practices that have supported public guarantee schemes and moratoria in euro-area countries. Focusing on the flexibility shown to default classifications, accounting practices and the treatment of non-performing loans, the paper identifies some undesirable effects and examines how soon such policies can be normalised.

Download the full regulatory news bulletin 

Authored by Yvonne Clapham