EBA consults on amending RTS on own funds and eligible liabilities under CRR

The European Banking Authority (EBA) has published a consultation paper proposing amendments to Commission Delegated Regulation (EU) No 241/2014 on the timing for the application for prior permission to reduce own funds and eligible liabilities instruments under Articles 77, 78 and 78a of the Capital Requirements Regulation (CRR). The assessment timeline to process the applications to reduce own funds and eligible liabilities instruments had been extended the from three to four months, to accommodate more complex evaluations by competent and resolution authorities. However, following a monitoring period and in light of feedback from institutions, the EBA now considers that authorities have gained sufficient experience to process applications more efficiently. As such, the EBA proposes reverting to a three-month timeframe. References to the simplified requirement for liquidation entities, with an MREL set at the loss absorption amount, are also deleted from the RTS. This is to reflect amendments made by Directive 2024/1174 to the Bank Recovery and Resolution Directive, which exclude liquidation entities from the requirement to obtain the prior permission of the resolution authority to affect the call, redemption, repayment or repurchase of liabilities that would meet the eligibility requirements for the MREL. The deadline for comments on the consultation is 9 October following which the EBA will submit the final draft RTS to the European Commission for adoption.

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