There have been many developments in national and European financial markets regulation during the past month. We provide a brief overview of these developments, which include a provisional agreement on the EU Banking Reform Package, the adoption of the bill on recovery and resolution of insurers and the bill implementing PSD2, ESMA’s publications on the Market Abuse Regulation, and a draft regulation supplementing the Prospectus Regulation.
EU Banking Reform Package
Following the financial crisis, ambitious reforms to the regulatory framework for the EU banking sector were implemented. These reforms aimed to bring back and safeguard financial stability and market confidence. In 2016, the European Commission published proposals to complete this reform agenda:
- Implementing outstanding elements resulting from international standards set by the Basel Committee and Financial Stability Board, and
- a comprehensive review of existing EU banking regulation.
Click here for our booklet on these original proposals.
In May 2018, the Council of the EU agreed on a General Approach for the EU Banking Reform Package. The European Parliament voted on its negotiation mandate in June 2018. Subsequently, trilogue negotiations began.
On 4 December 2018, the Council of the EU and the European Parliamentreached a provisional political agreement on certain aspects of the EU Banking Reform Package. According to the Council of the EU’s general endorsement, a number of outstanding issues remain, including: remuneration, off-balance sheet guarantees to Collective Investment Undertakings, and treatment of shadow-banking or market-based finance.
Negotiations on the remaining issues will continue both at the technical and political level. The Council of the EU indicates that this will take place with a view to finalising negotiations by the end of 2018. Once the negotiations have been finalised, both the European Parliament and the Council of the EU will need to formally adopt the package.
The provisional agreement relates to the amending of the following two regulations and two directives:
- Bank capital requirements (amendments to the Capital Requirements Regulation and Capital Requirements Directive IV);
- Recovery and resolution of banks (amendments to the Bank Recovery and Resolution Directive and the Single Resolution Mechanism Regulation).