European Central Bank’s public consultation on the application of regulatory options and discretions available to authorities with respect to the prudential regulation of credit institutions

On 8 November 2024, the European Central Bank (ECB) announced a public consultation on revisions it intends to make to its regulation concerning the application of options and discretions available to supervisory authorities with respect to prudential regulation.

The updates put forth by the ECB are mainly related to the EU’s so-called new Banking Package (finalisation of Basel III). However, they also account for other amendment needs identified after the previous update conducted in 2022.

The invitation to comment is available on the ECB website. The consultation period ends on 10 January 2025.

ECB regulation on the application of regulatory options available to authorities includes directly binding regulation for significant credit institutions under the ECB’s direct supervision and guidance for supervisors of significant credit institutions on the grounds on which institution-specific authorisations may be granted. The regulation also includes legally binding guidance addressed to national competent authorities and recommendations national authorities may apply to less significant institutions. Current regulation is available on the ECB website.

The FIN-FSA will incorporate any revisions made to the abovementioned binding guidance in its Regulations and guidelines 5/2019: Regulations and guidelines related to the Capital Requirements Regulation. As a rule, it will also observe any amendments made to abovementioned ECB recommendations in considering applications for authorisation by individual less significant institutions.

For further information, please contact

Taina Erovaara-Williams, Chief Specialist, tel. +358 9 831 5422 or taina.erovaara-williams(at)fiva.fi