The European Banking Authority (EBA) has published a final report amending its guidelines on the application of the definition of default under Article 178 of the Capital Requirements Regulation (CRR), as amended by CRR3. This follows the EBA's July 2025 consultation. The report introduces targeted amendments to better reflect specific aspects of non recourse factoring, increasing the exceptional days past due threshold at invoice level from 30 to 90 days for factoring arrangements to better reflect the economic features of purchased receivables. The amended guidelines also confirm that the existing 1% threshold for the net present value loss in debt restructuring remains appropriate for prudential default recognition. In addition, the guidelines have been updated to align with the amendments introduced by the CRR3. The EBA has decided not to introduce changes to shorten the probation period or to introduce specific treatment for the recognition of moratoria, considering the existing framework already provides sufficient flexibility. The guidelines will now be translated into the official EU languages and published on the EBA website. They will apply from three months after the date of publication. Competent authorities must report on whether they comply with the guidelines within two months after the publication of the translations.

The European Banking Authority (EBA) has published a consultation paper containing draft regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) 2021/598 supplementing the Capital Requirements Regulation (EU) No 575/2013 (CRR) with regard to RTS for assigning risk weights to specialised lending exposures under the supervisory slotting criteria approach (SSCA).

The proposed amendments aim to: (i) align the existing RTS with changes introduced by Regulation (EU) 2024/1623 (CRR3), including updated definitions and terminology; (ii) clarify how environmental, social and governance (ESG) risk factors should be taken into consideration when applying the SSCA; and (iii) simplify and harmonise the application of the assessment criteria by leveraging on the supervisory experience gathered since the publication of the original RTS. This includes several clarifications, in particular in the annexes where several criteria are amended, streamlined or complemented by specifying new sub-factors or sub-factor components. The deadline for comments is 7 August with a public hearing scheduled for 27 May.

The Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026 (which were made on 29 April) has been published, together with an explanatory memorandum. The Regulations relate to changes to the UK implementation of Basel 3.1. They insert a new Article 465A into the UK Capital Requirements Regulation as a transitional provision relating to the UK Prudential Regulation Authority's (PRA) internal model approach rules. This means that credit institutions and designated investment firms will not be required to apply the PRA's market risk rules on updated internal model requirements during the transitional period between 1 January 2027 and 31 December 2027. The PRA rules will allow institutions to continue to use their existing models during this transitional period until 1 January 2028. The draft version of the Regulations was published in March. The Regulations will come into force on 30 December.

The Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026 were published with an explanatory memorandum. This follows HM Treasury's policy response on applying the Financial Services and Markets Act 2000 model of regulation to the UK Capital Requirements Regulation (UK CRR). The Regulations make amendments to support the transition away from retained EU law by ensuring that key prudential definitions continue to be set out in domestic legislation ahead of the revocation of relevant provisions in the UK CRR. The draft version was laid before Parliament in March. The Regulations enter into force on 1 January 2027.

The European Banking Authority (EBA) has published a decision confirming it has streamlined its guidelines on connected clients as defined under the Capital Requirements Regulation, by partially deleting certain sections following the entry into force of Commission Delegated Regulation (EU) 2024/1728. This Delegated Regulation introduces binding regulatory technical standards specifying when institutions must identify groups of connected clients, rendering some existing guideline provisions redundant. As a result, the EBA has removed those elements of the guidelines that are no longer necessary. The decision is accompanied by a consolidated version of the guidelines, reflecting the partial deletions and applies to credit institutions across the EU.

The European Banking Authority (EBA) has updated the list of correlated currencies in accordance with the technical standards mandated by Article 354 of the EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (CRR). Article 354 allows institutions to provide lower own funds requirements against positions in relevant closely correlated currencies.

The EBA updated the list by way of a draft Implementing Regulation amending the relevant technical standards (which are set out in Implementing Regulation (EU) 2015/2197), with an Annex confirming the revised list. The update is intended to ensure that the listed currency correlations continue to reflect actual market conditions and is based on the EBA's latest assessment using data up to 31 March 2025. The amendments do not introduce any methodological or substantive policy changes, but instead apply the existing framework in Implementing Regulation (EU) 2015/2197 to an updated data set. Once adopted, the Amending Implementing Regulation will replace the current Annex to Implementing Regulation (EU) 2015/2197 and will enter into force on the 20th day following publication in the Official Journal of the European Union. The revised list has been submitted to the European Commission for endorsement, as confirmed in the EBA's press release.

The UK Prudential Regulation Authority (PRA) has published policy statement LIAF01/26, finalising a series of amendments to its Rulebook and policy materials that it considers low impact. The changes include:

• Finalisation of amendments to the Fees Part of the PRA Rulebook consulted on in the PRA's November 2025 consultation on regulatory fees and levies for 2026/27, which include updating invoice due dates for firms paying GBP50,000 or more in annual PRA and UK Financial Conduct Authority fees (effective 30 April).
• Removal of redundant MiFID Organisational Regulation references from the Skills, Knowledge and Expertise Part of the Rulebook following post‑EU withdrawal reforms (effective 30 April).
• Clarificatory amendments to Statement of Policy (SoP) 2/23 on the Small Domestic Deposit Taker (SDDT) regime, providing guidance for applicants with non‑UK parent undertakings (effective 23 April).

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The European Banking Authority (EBA) has published an opinion responding to the European Commission's (EC) proposed amendments to the EBA's final draft regulatory technical standards (RTS) on operational risk under the Capital Requirements Regulation (CRR) as amended by CRR3. The EBA previously published reports on the final draft RTS and implementing technical standards in June 2025, followed by further final draft RTS on operational risk loss, in August 2025. In March, the EC informed the EBA in a letter of its intention to endorse the draft RTS with amendments, including bundling the RTS into one single Commission Delegated Regulation.

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The UK Prudential Regulation Authority (PRA) has published consultation paper LIAC01/26, proposing a series of low-impact amendments to its Rulebook and policy materials.

The proposals include:

• Amendments to the Groups Part of the PRA Rulebook to clarify the treatment of voting rights in proportional consolidation for CRR firms.
• Consequential changes to various PRA rules following the revocation of certain provisions in the Capital Requirements Regulations 2013 by HM Treasury through the Financial Services and Markets Act 2023 (Commencements No.12 and Saving Provisions) Regulations 2026, applying from 1 January 2027.
• Technical amendments to the UK countercyclical capital buffer technical standard in light of Basel 3.1 implementation, applying from 1 January 2027.
• Changes to Statements of Policy (SoP) on other systemically important institutions (O‑SIIs), including moving the designation exercise from an annual to a biennial assessment. These changes are proposed to apply from 1 November, alongside clarifications on the scope and application of the O‑SII buffer in SoP1/16 and SoP4/16, which are proposed to apply from July.
• Amendments to SoP1/20 to reduce the frequency of publication of Solvency II technical information to once every three years. This would apply in July.

The deadline for comments is 21 May.

The European Commission has launched a consultation on a draft delegated act proposing targeted amendments to the EU prudential framework for banks' market risk, specifically the Fundamental Review of the Trading Book (FRTB) under the Capital Requirements Regulation (CRR). While most Basel III reforms have applied since 1 January 2025, the FRTB has been deferred on several occasions, most recently to 1 January 2027 in response to uncertainty around implementation timelines and potential deviations from the Basel standards in other major jurisdictions. The draft delegated act sets out amendments, intended to apply from 1 January 2027, to support a level playing field for EU banks competing internationally in trading activities by offsetting the negative capital impact of the FRTB for a period of three years. The proposals reflect feedback from a November 2025 consultation and input from member state experts. Formal adoption of the delegated act is expected on 19 May, to provide banks and supervisors with greater certainty ahead of implementation.

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The UK Prudential Regulation Authority (PRA) has published its business plan for 2026/27, setting out its regulatory and supervisory priorities for the year ahead.

The PRA's strategic priorities include:

• Maintaining the safety and soundness of the banking and insurance sectors, and ensuring continued resilience, with a focus on embedding major reforms such as Basel 3.1 and the small domestic deposit takers regime, as well as enhanced operational resilience and cyber risk management.
• Being at the forefront of identifying new and emerging risks, including those arising from geopolitical developments, economic and financial market developments and the evolving use of AI. The PRA will also continue to support the Basel Committee on Banking Supervision's targeted review of the prudential treatment of cryptoasset exposures and monitor sector-wide resilience while maintaining international and bilateral engagement.
• Supporting competitive, dynamic and innovative markets, while facilitating international competitiveness and growth through streamlined reporting (via the Future Banking Data programme) and tailoring support for fast-growing and innovative financial firms through its new scale-up unit and the concierge service for new inbound international firms.
• Running as an inclusive, efficient and responsive regulator within the Bank of England and increasing its adoption of emerging technology tools to improve its regulatory processes for firm authorisations, the Senior Managers and Certification Regime, internal model permission application and approvals.

The business plan sets out more detailed initiatives under each strategic priority.

The European Banking Authority (EBA) has published its response to the European Commission's (EC) targeted consultation on the competitiveness of the EU banking sector. The EBA emphasises the importance of completing and deepening the single market and the banking union as key drivers of competitiveness. It also highlights the resilience of EU banks strengthened by the post‑financial crisis reforms, while noting ongoing challenges including geopolitical risks, exposures to non‑bank financial institutions and digital transformation.

Building on the findings from its October 2025 report on the efficiency of the regulatory and supervisory framework (which put forward 21 recommendations to simplify the banking rulebook) the EBA emphasises that competitiveness can be enhanced through targeted simplification. It states that such efforts should respect principles of: maintaining financial stability and credibility through continued commitment to Basel III standards; enabling banks to fully benefit from the single market while preserving and deepening it and the banking union; and ensuring an EU wide level playing field— applying proportionality where appropriate to avoid the fragmentation of the rulebook. The EBA confirms it will continue to work closely with the EC to support a competitive, resilient and stable EU banking sector.

The European Commission (EC) has adopted a Delegated Regulation supplementing the Capital Requirements Regulation (EU) No 575/2013 (CRR), as amended by the CRR3. It sets out regulatory technical standards (RTS) specifying what constitutes an equivalent legal mechanism to ensure that a residential property under construction is completed within a reasonable timeframe. The Delegated Regulation is based on the European Banking Authority's final draft RTS published in August 2025. Article 124 of the CRR sets out the requirements for assigning risk weights to exposures secured by mortgages on immovable property, including conditions under which exposures to properties under construction may qualify for preferential treatment. The EC has the power under Article 124(14) to specify what constitutes an equivalent legal mechanism to ensure that the property under construction is completed within a reasonable timeframe.

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The Single Resolution Board (SRB) has published its response to the European Commission's (EC) targeted consultation on the competitiveness of the EU banking sector. The SRB emphasises that while the banking union has substantially strengthened the resilience of EU banks, its incomplete nature continues to hinder cross-border integration and efficiency.

The SRB highlights the need for progress towards a more integrated European deposit protection framework, a strengthened and more predictable approach to liquidity in resolution, and improvements to the cross border allocation of capital and liquidity within banking groups, supported by robust resolvability safeguards. It also calls for targeted simplification of the regulatory framework, including greater coherence across prudential, resolution and macroprudential requirements and streamlined minimum requirement for own funds and eligible liabilities processes, while maintaining overall resilience and financial stability. The SRB states that these measures would support both market integration and the international competitiveness of EU banks, and confirmed its intention to continue engaging with the EC as it develops its policy response.

The European Central Bank (ECB) has published its Governing Council's response to the European Commission's targeted consultation on the competitiveness of the EU banking sector. The response builds on the ECB's High-Level Task Force (HLTF) simplification proposals, endorsed by the ECB in December 2025. The response and proposals are endorsed by all euro area central banks.

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The European Banking Authority (EBA) has announced a series of measures, including publishing two consultation papers, to simplify the supervisory reporting framework under the EU Capital Requirements Regulation (CRR). The aim is to deliver a simpler, smarter and more proportionate framework. The deadline for comments on both consultation papers is 10 July, except for IFRS 18-related changes in FINREP in the first consultation, where the deadline is 10 May. 

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The European Banking Authority (EBA) has announced that it will regularly publish a list of known issues relating to the data point model (DPM) framework, with the aim of enhancing transparency and supporting reporting institutions. The list will serve as a single reference point for recurring technical issues. This is part of the EBA's broader simplification efforts to support the implementation of reporting requirements and reduce unnecessary operational burden, while maintaining data quality and supervisory objectives. The list published on 9 April covers issues relating to pillar 3 disclosures and resolution planning reporting.

The European Banking Authority (EBA) has launched a consultation on revised guidelines on limits on exposures to shadow banking entities (SBEs) carrying out banking activities outside a regulated framework, under Article 395(2) and (2a) of the Capital Requirements Regulation (CRR). The proposed revisions update the 2015 Guidelines to align with the harmonised CRR framework introduced by Commission Delegated Regulation (EU) 2023/2779, which now provides binding and maximum harmonised criteria for identifying SBEs. Accordingly, definitions and scoping elements previously contained in the guidelines have been removed, including the 0.25% materiality threshold, to ensure consistency with CRR reporting and disclosure requirements.

The guidelines retain their core purpose of setting supervisory expectations on how institutions should manage and monitor their exposures to SBEs to ensure that risks arising from such exposures are properly identified, measured, limited and controlled. They preserve existing governance requirements and the primary and fallback methods for setting exposure limits. No new quantitative limits are to be introduced at this stage. Input gathered through the consultation will inform the finalisation of the guidelines and broader EBA policy work, including a report on the contribution of SBEs to the capital markets union and an assessment of institutions' exposures and limits, expected by December 2027. The deadline for comments is 9 July, with a virtual public hearing scheduled for 25 June.

The Network for Greening the Financial System (NGFS) has released a new package of materials aimed at supporting central banks and supervisors in assessing and managing nature‑related financial risks. The package builds on the NGFS' 2024 Conceptual Framework and comprises three complementary notes covering: (i) nature‑related data, including guidance on identifying and prioritising relevant data sources and metrics, and the use of case studies and AI to improve data quality and availability; (ii) modelling tools for nature scenarios, highlighting current limitations in capturing interactions between nature, climate and the economy and setting out core design principles for future NGFS scenarios; and (iii) supervisory practices, proposing a pragmatic four‑step approach that builds on existing climate supervision and addresses current limitations. It offers a pathway towards a more integrated climate-nature prudential framework.

The European Central Bank (ECB) and the European Systemic Risk Board (ESRB) have published a joint report on the usability of capital buffers. The report analyses how prudential and resolution frameworks interact, and how this interaction may limit buffer usability.

Key takeaways include:

• Prudential and resolution frameworks are distinct but complementary. Their interaction is complicated. In particular, the report notes that the way common equity tier capital may be used to satisfy multiple requirements may limit its ability to absorb losses.
• In addition to the double-counting of capital, resolution frameworks can impact buffer usability when authorities use their discretionary powers to apply restrictions relating to the maximum distributable amount related to MREL.
• To evaluate the macroprudential impact of the relationship between the frameworks, a consistent methodology is needed. In line with this, the report defines the following key concepts: buffer usability; releasability; capital headroom; and loss-absorption capacity. It also provides a methodology for quantifying and evaluating these concepts. In addition, the report has developed the analytical framework, and updated the buffer usability simulation tool which has been used by national authorities in recent years.

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The Bank of England (BoE) has published the record of the Financial Policy Committee's (FPC) meeting held on 27 March to identify risks to financial stability and agree policy actions aimed at safeguarding the resilience of the UK financial system. The FPC assesses that the conflict in the Middle East has triggered a substantial negative supply shock, leading to significant market moves (including higher and more volatile energy prices and higher government bond yields). While the financial system has been resilient so far, the shock is expected to weigh on growth, increase inflation and tighten financial conditions. The FPC highlights that these developments could interact with existing vulnerabilities it has previously identified in sovereign debt markets, risky asset valuations and risky credit markets (notably private credit), increasing the likelihood that multiple vulnerabilities could crystallise at the same time and amplify risks to financial stability. The FPC emphasises the need for timely and active risk management by market participants, including stress testing and liquidity preparedness that incorporate scenarios involving further sudden and significant price adjustments.

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The European Supervisory Authorities (ESAs, comprising the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) have published official translations of their joint final guidelines on integrating environmental, social and governance (ESG) risks into financial stress tests for banks and insurers under the Capital Requirements Directive and the Solvency II Directive. First published in January, the guidelines aim to harmonise how competent authorities across the EU consistently incorporate ESG risks into their supervisory frameworks. They set expectations on long term considerations and common standards for ESG stress testing methodologies, including undertaking risk based materiality assessments across both short term (up to five years) and long term (at least ten years) horizons. The joint guidelines will apply from 1 January 2027. Competent authorities must now notify the respective ESA by 31 May on whether they comply or intend to comply with the guidelines, or where relevant, provide their reasons for non-compliance.

The European Central Bank (ECB) has announced changes to streamline the supervision of banks' internal models for credit risk, aimed at making the approval process for material model changes faster and more predictable while maintaining prudential safeguards. From 1 October, banks will be permitted to implement material changes to their internal models for credit risk shortly after submitting a complete application package. This will allow banks to implement model changes quickly, without having to maintain old and new models in parallel while awaiting supervisory review. This is subject to confirmation by the bank's internal control function that the revised model complies with regulatory requirements and that the bank is ready to implement the change. Where changes lead to lower risk weights, expedited approval will still apply, but any capital benefit will be capped by a supervisory floor applied to all approved model changes, and only lifted once the ECB completes a targeted on site review. The ECB will retain the option to apply the standard approval process in higher risk or sensitive cases, with banks waiting for the outcome of a dedicated on site investigation. Material model changes will no longer automatically trigger an on-site investigation. On the same day, the EBA also published final draft regulatory technical standards amending the framework for assessing the materiality of changes to internal ratings based models.

The European Banking Authority (EBA) has published a final report with final draft regulatory technical standards (RTS) amending the framework for assessing the materiality of changes to internal ratings based models under the Capital Requirements Regulation (CRR). The aim is to streamline supervisory approvals and reduce undue delays in model implementation. The EBA notes that the high volume of model changes classified as "material" has strained supervisory resources under the current approval processes, creating uncertainty for institutions and hampering effective model use and timely model improvements.

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The European Commission (EC) has announced that it is taking action against several EU member states that have failed to notify it of measures they have adopted to transpose EU directives into their national laws. In particular, it has sent letters of formal notice to:

• Belgium, Bulgaria, Cyprus, Denmark, Estonia, Greece, Spain, France, Italy, Latvia, Luxembourg, Lithuania, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia and Sweden for failing to fully transpose the European Single Access Point (ESAP) Omnibus Directive (Directive 2023/2864).
• Belgium, Bulgaria, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovakia, Finland and Sweden for failing to fully transpose the amending Sixth Capital Requirements Directive (Directive 2024/1619).

The member states concerned now have two months to respond, complete their transposition and notify their measures to the EC. In the absence of a satisfactory response, the EC may decide to issue a reasoned opinion.

Commission Implementing Regulation (EU) 2026/722 amending Implementing Regulation (EU) 2024/3172 was published in the Official Journal of the European Union (OJ). The Regulation amends the implementing technical standards (ITS) on public disclosures under the Capital Requirements Regulation (CRR) to support the introduction of the European Banking Authority's (EBA) Pillar 3 Data Hub and its single access point for disclosures. It requires institutions other than small and non complex institutions to submit Pillar 3 disclosures to the EBA via the Pillar 3 data hub using harmonised, uniform formats that are both human readable and machine readable. For small and non-complex institutions, the relevant IT tools are still being designed given the importance of making them proportionate.

Recognising that institutions may require additional time to comply with the new disclosure formats, the Regulation allows alternative means of disclosure for submissions with a 2025 reference date. In addition, the Regulation extends existing transitional disclosure provisions and defers the repeal of Implementing Regulation (EU) 2021/637 by one year, reflecting the postponement of the market risk own funds requirements to 1 January 2027. The Regulation will apply from 16 April, being the 20th day following publication in the OJ and is directly applicable in all member states.

The UK Prudential Regulation Authority (PRA) has published policy statement PS11/26 on disclosure, including resolvability resources, capital distribution constraints (CDCs) and the basis for firms' Pillar 3 disclosures. Having considered the responses to the July 2025 consultation, the PRA has made no changes to the draft policy consulted on but has made minor corrections and clarifications to the draft rules and instructions. These clarifications do not affect the substance of the policy or rules as set out in the consultation paper.

The PRA's final policy includes:

• The introduction of standardised Minimum Requirement for Own Funds and Eligible Liabilities (MREL) disclosure templates, aligned with Basel Committee on Banking Supervision Total Loss Absorbing Capacity (TLAC) formats but adapted for the UK.
• Increased transparency and consistency of firms' disclosure on MREL resources to strengthen market discipline, support confidence in orderly resolution and enhance overall financial stability.
• A new qualitative disclosure requirement for firms subject to capital distribution constraints to allow for more meaningful assessment by market participants of the likely impact of those capital distribution restrictions. As the Systemic Risk Buffer (SRB) has been replaced in the UK by the O-SII buffer since December 2020, the PRA has also removed the SRB disclosure requirement to ensure consistency with the current capital buffer framework.

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The Basel Committee on Banking Supervision (BCBS) has published a document containing a finalised technical amendment (TA) and a response to a frequently asked question (FAQ) to help promote the consistent global interpretation of the Basel framework. The TA relates to the standardised approach to operational risk. It clarifies the treatment of "rental income from investment properties" under the business indicator, which is used as a key input in calculating operational risk capital requirements. The TA was originally consulted on in June 2025 and, following feedback, it now incorporates similar changes to the treatment of "interest expenses". The BCBS has agreed to implement the final revised standard by 1 April 2029. The amended text has also been incorporated into the consolidated Basel framework.

In addition, the document also includes a finalised response to an FAQ on market risk and consequential amendments to related FAQs. These have also been added to the Basel framework.

The European Banking Authority (EBA) has published final draft amending regulatory technical standards (RTS) shortening 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 (Regulation 575/2013). The amendments shorten the timeframe for competent and resolution authorities to process an institution's application to reduce own funds and eligible liabilities instruments from four to three months on the basis that authorities now have sufficient experience with these procedures to carry out the assessments more efficiently. In addition, following the exemption introduced by Directive 2024/1174 (the Daisy Chain Directive), which removes the requirement for liquidation entities to obtain prior permission to reduce eligible liabilities instruments, the provisions setting a simplified procedure for these entities have been deleted. The draft regulatory technical standards will be submitted to the EU Commission for endorsement following which they will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union (OJ). They will enter into force 20 days after publication in the OJ.

The UK Prudential Regulation Authority (PRA) has published consultation paper CP5/26 proposing reforms to modernise the existing prudential liquidity framework, taking into account advances in digital banking, payments and communications, and structural developments in the supply of central bank reserves. The proposals focus on targeted amendments to Pillar 2 and through changes to the Internal Liquidity Adequacy Assessment (ILAA) rules and related supervisory expectations within relevant supervisory statements.

Key proposals include:

• Requiring firms to assess the composition of their liquidity resources, identify barriers to monetising assets and conduct internal stress testing to evaluate their ability to respond to rapid and severe liquidity outflows within the first week of stress. The PRA also seeks to replace the concept of "marketable asset risk" with a broader assessment of monetisation risk.
• Removing the exemption for sovereign bonds and other Level 1 assets from annual testing of monetising non-liquid assets, to provide greater assurance that firms are operationally prepared to raise liquidity quickly in stress.

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The European Commission has adopted a Delegated Regulation amending the regulatory technical standards (RTS) set out in Delegated Regulation (EU) 2023/206. The Amending Regulation is technical in nature and updates the RTS to ensure consistency with changes introduced to the Capital Requirements Regulation (EU) No 575/2013 (CRR) by Regulation (EU) 2024/1623 (CRR3). In particular, the amendments: (i) align the references to Article 124 CRR, which have become obsolete following the renumbering and revisions introduced by CRR3 concerning preferential risk weights for exposures secured by immovable property under the Standardised Approach; and (ii) reflect the updated terminology in Article 164 CRR, which now refers to the ability of an authority designated under Article 164(5) to set loss given default (LGD) input floor values, rather than higher minimum LGD values, for exposures located in one or more parts of its territory under the Internal Ratings Based Approach.

The Delegated Regulation is based on final draft RTS developed by the European Banking Authority and published in December 2025. It will enter into force 20 days after its publication in the Official Journal of the European Union and will be directly applicable in all member states.

The UK Financial Conduct Authority (FCA) has published its quarterly consultation paper No. 51, inviting feedback on proposed amendments to its Handbook. Significantly, it included a proposal to increase the clearing threshold for commodity derivatives under the UK version of the European Market Infrastructure Regulation (UK EMIR) to EUR5 billion, to ensure the threshold remains appropriate in light of higher commodity prices.

Other changes include:

• Consequential changes to the client assets sourcebook to ensure its effective application to regulated cryptoasset activities.
• Rehousing some provisions in Article 17 of the UK version of Commission Delegated Regulation (EU) 2017/587 (RTS 1) into the framework now provided by MAR 11A and tidying up provisions relating to private rights of action.
• Making targeted changes to the collective investment scheme sourcebook to reflect amendments in the 2025 Statement of Recommended Practice for authorised funds.

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The UK Prudential Regulation Authority (PRA) has published policy statement PS6/26 on its approach to recognised exchanges and main indices in the context of the revocation and restatement of the UK Capital Requirements Regulation (UK CRR). The PRA previously consulted on the proposals in March 2025 (CP3/25). In the policy statement, the PRA confirms that it will proceed with introducing a new Recognised Exchanges Part in its Rulebook, specifying conditions under Article 4(1)(72)(c) of the UK CRR for the purposes of identifying recognised exchanges (REs) or assets traded on these exchanges. Assets traded on REs receive a preferential treatment within the bank prudential framework. Only minor edits to the original proposal have been made for clarity. Proposed consequential amendments to the definition of "higher risk equity exposure" in the PRA's near-final rules implementing Basel 3.1 will also be maintained.

The PRA also confirms that it will restate in the Glossary to the PRA Rulebook the list of main indices currently set out in implementing technical standards in UK Commission Implementing Regulation (EU) 2016/1646. In addition, the policy statement sets out the PRA's final policy to delete supervisory statement (SS20/13) on third country equivalence aspects of the credit risk provisions in the CRR and recognised exchanges. It also makes amendments to the Counterparty Credit Risk (CRR) Part of the PRA Rulebook and the Credit Risk Mitigation (CRR) Part of the PRA Rulebook which are consequential to the PRA's REs policy proposals and the proposal to restate the list of main indices into the PRA Rulebook.

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The European Banking Authority (EBA) has published its final report with final draft implementing technical standards (ITS) on the supervisory reporting of third-country branches (TCBs) under the Capital Requirements Directive VI (CRD VI). Under the new framework introduced by CRD VI, TCBs will be required to submit two sets of reports covering TCB level financial and regulatory information and head-undertaking level quantitative and qualitative data. A key feature of the draft ITS is a proportionate "core and supplement" model, which tailors reporting requirements to the systemic relevance of each TCB. This means smaller and less complex branches are required to submit a core set of key data while larger and more complex branches report on additional details.

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The draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026 have been published, together with a draft explanatory memorandum. The draft Regulations relate to changes to the UK implementation of Basel 3.1. They insert a new Article 465A into the UK Capital Requirements Regulation (UK CRR), introducing a transitional provision requiring credit institutions and designated investment firms not to apply the UK Prudential Regulation Authority's (PRA) market risk rules on updated internal model requirements between 1 January 2027 and 31 December 2027. This means that the UK implementation of the Basel 3.1 internal model requirements for market risk will now be delayed until 1 January 2028. Firms will be allowed to continue using their existing internal models under the current approach until then. The PRA previously consulted on adjustments to the market risk framework in July 2025. The Regulations will come into force on 30 December.

The draft Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026 have been laid before the UK Parliament and published with a draft explanatory memorandum. This follows HM Treasury's policy response on applying the Financial Services and Markets Act 2000 model of regulation to the UK Capital Requirements Regulation (UK CRR). The Regulations restate in legislation, with effect from 1 January 2027, the definitions previously contained in Articles 4, 4A, 4B and 5 of the UK CRR, which were revoked by virtue of section 1(1) of, and Schedule 1 to, the Financial Services and Markets Act 2023. Article 4 of the UK CRR will be revoked on 1 January 2027, together with other articles containing definitions relating to the UK banking prudential framework. The relevant legislation revoking these articles was published in February 2026.

The European Commission (EC) has launched a consultation seeking feedback on obstacles faced by private equity investors when exiting investments in EU private companies and on potential ways to address these obstacles. The consultation forms part of the EC's work under the Savings and Investments Union and aims to improve access to finance for EU start‑ups and scale‑ups. The EC notes that persistent challenges, such as not being able to wait for an initial public offering (IPO) to realise capital gains or the lack of a credible valuation of private assets may hinder a transaction. These difficulties reduce market activity, limiting the availability of growth capital and possibly prompting companies to move outside the EU in search of funding. Therefore, the EC is seeking views on the: (i) possible barriers or issues for exiting private equity investments in the EU; (ii) the merits and possible design features of a platform for secondary trading of private company shares; and (iii) the potential of an extended use of such a platform for raising new equity capital. The deadline for responses is 27 April, and the feedback will inform the EC's decision on whether further regulatory or policy action is warranted in this area.

The European Banking Authority (EBA) has published its final guidelines on instruments available for third-country branches (TCBs) for unrestricted and immediate use to cover risks or losses under Article 48e(2)(c) of the Capital Requirements Directive (2013/36/EU) (CRD IV). Under Article 48e of the CRD IV Directive, as amended by Directive (EU) 2024/1619 (CRD VI), an authorised TCB must maintain a minimum capital endowment at all times. Article 48e(2)(c) specifies that it may use for this purpose instruments that are available to the TCB for unrestricted and immediate use to cover risks or losses as soon as those occur. The EBA was mandated to issue guidelines on the instruments that can be used for this purpose.

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The Basel Committee on Banking Supervision (BCBS) has launched a consultation on a consolidated version of its guidelines and sound practices. This version seeks to reorganise existing guidance into a modular structure, replicating the BCBS's current format for the Basel framework. The guidelines are organised into 13 thematic modules, setting out expectations and practices on specific topics, each of which is divided into further chapters. The BCBS confirms that the consolidation does not introduce new standards or expectations, but removes outdated, duplicative or superseded content, reducing the overall volume of guidance by approximately 75%. Annex 2 to the consultation incudes a table of the current guidelines and sound practices that the BCBS reviewed as part of the consolidation project. It also outlines the proposed recommendation for whether and how each of these documents should be incorporated into the new framework. A new section on its webpage has also launched, but in draft form for feedback. The BCBS seeks feedback on three particular questions: 1) Does the framework effectively remove outdated, superseded and duplicative materials? 2) Does the proposed reorganisation and redrafting achieve the objective of improving clarity and readability without introducing new expectations? 3) Are there particular topics that the BCBS should review more substantively, or areas where further guidance is warranted? The deadline for comments is 26 June.

The European Banking Authority (EBA) has published an opinion and related letter regarding the European Commission's (EC') proposed amendments to the final draft regulatory technical standards (RTS). These RTS specify what constitutes an equivalent legal mechanism to ensure that a residential property under construction is completed within a reasonable timeframe, for the purposes of risk-weighting requirements under the Capital Requirements Regulation (CRR). The EBA is resisting the EC' proposal to increase the cap on the risk weight applicable to the protection provider from 20% to 30% under the standardised approach, arguing the 20% threshold represents a core prudential safeguard. It also recommends reinstating the requirement that the completion guarantee be required by the law of the Member State where the residential property is being built. In addition, the opinion provides targeted comments on certain drafting changes introduced by the EC, including the treatment of intragroup arrangements and specific provisions relating to enforceability and force majeure. A revised version of the draft RTS reflecting the EBA's recommended drafting adjustments is set out in Annex I to the opinion. The EBA notes that it remains committed to working constructively with the EC to ensure the timely adoption of a robust and legally sound framework.

The Financial Services and Markets Act 2023 (Commencement No 13) Regulations 2026 were made, following HM Treasury's policy response on applying the Financial Services and Markets Act 2000 model of regulation to the UK Capital Requirements Regulation. The regulations effect the revocation of Articles 4, 4A, 4B and 5 of the UK Capital Requirements Regulation (CRR) on 1 January 2027, by virtue of section 1(1) of, and Schedule 1 to, FSMA 2023. The Articles set to be revoked provide for definitions of terms used in the CRR which will be restated in the Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026 (except for the definition of "IFPR financial institution" which will be restated in a separate statutory instrument providing for consequential amendments later this year) and PRA rules. Some definitions in Article 4 were already set to be revoked on 1 January 2027 by virtue of the Financial Services and Markets Act 2023 (Commencement No. 12 and Saving Provisions) Regulations 2026.

The European Banking Authority (EBA) has announced that given the extensive work already carried out, it will not prioritise the monitoring of legacy instruments, while maintaining its review of the quality of own funds and eligible liabilities. The EBA is confident that competent authorities will continue to monitor the remaining limited and specific cases on the basis of the guidance provided, including in its opinion on the prudential treatment of legacy instruments and its opinion on legacy instruments: outcome of its implementation.

The Basel Committee on Banking Supervision (BCBS) has issued a press release following its virtual meeting on 24–25 February, at which it discussed recent market developments and the global banking outlook. With respect to vulnerabilities in government bond‑backed repo markets, the BCBS notes that the implementation of its finalised counterparty credit risk management guidelines, particularly in relation to securities financing transactions and collateral management, should help mitigate these risks but it will monitor implementation progress. Regarding the expedited targeted review of the prudential standards for banks' cryptoasset exposures, an update on progress will be provided later in the year. The BCBS has approved a technical amendment to the standardised approach to operational risk, following its previous consultation, and a response to a frequently asked question on the market risk framework. Both will be published in March.

The UK Prudential Regulation Authority (PRA) has published policy statement PS5/26, finalising amendments to its framework for credit unions wishing to invest in credit union service organisations (CUSOs). Following its June 2025 consultation, the PRA largely finalised its policy as consulted on, including: (i) amending the Credit Unions Part of the PRA Rulebook to clarify that credit unions may invest in CUSOs; (ii) updating Supervisory Statement (SS)2/23 to add a new chapter setting out expectations for credit unions that invest in or use CUSOs; and (iii) making consequential changes to chapter 17 of SS2/23 following the deletion of SS20/15.

The PRA has also made targeted changes in response to feedback including:

• Amending the credit union investment rules to provide that credit unions may invest in CUSOs that serve other UK-regulated mutuals (those with a Part 4A permission).
• Clarifying that a credit union may partner with non-credit unions to own a CUSO. 
• Introducing safeguards to ensure the risks associated with the expansion of CUSO scope in this way are managed.
• Increasing the maximum investment that a credit union can make in a CUSO from 5% to 7.5% of its capital, together with clarifications on the practical application of the limit.

The rule changes took effect on 20 February, with the new supervisory expectations in the new chapter of SS2/23 applying from 20 August, allowing a six‑month implementation period.

The UK Prudential Regulation Authority (PRA) has published consultation paper CP3/26 setting out proposed amendments to the PRA Rulebook to accommodate HM Treasury's (HMT) planned overseas prudential requirements regime (OPRR), which will restate and modify certain existing Capital Requirements Regulation (CRR) equivalence provisions in UK legislation. HMT consulted on the creation of the regime in July 2025 and published its response on the same day, and in parallel to the PRA's consultation. The PRA's proposals are intended to ensure alignment between the PRA Rulebook and the OPRR framework, while largely preserving existing prudential outcomes and imposing no material additional costs on firms. Key changes include targeted amendments across multiple CRR-related parts of the Rulebook (including credit risk, market risk, securitisation and reporting) to clarify the treatment of exposures to overseas institutions and covered bonds following HMT designation decisions under the OPRR. The PRA also proposes minor consequential changes to Statement of Policy 5/15 on Pillar 2 capital. The deadline for responses is 2 April. The proposed changes are expected to take effect alongside other elements of the Basel 3.1 package on 1 January 2027.

HM Treasury (HMT) has published a policy update response on applying the Financial Services and Markets Act 2000 model of regulation to the UK Capital Requirements Regulation (UK CRR), following its July 2025 consultation on Basel 3.1, the overseas recognition regimes and key UK CRR definitions. In this response, HMT broadly maintains its proposed approach while making targeted clarifications in response to feedback.

On Basel 3.1, HMT notes support for facilitating the UK Prudential Regulation Authority's (PRA) delayed implementation of aspects of Basel 3.1 and reiterates that the legislative framework is intended to support the PRA's firm‑facing rules, while committing to clearer communication and coordination of timelines across the wider FSMA transition.

HMT will establish the overseas prudential requirements regime (OPRR) to restate existing equivalence decisions made under the UK CRR equivalence regimes so that jurisdictions currently deemed equivalent are treated as designated. It will also introduce a new power through the OPRR to designate jurisdictions for overseas covered bonds, with current liquidity treatment maintained in the short term while further prudential changes are explored with the PRA. Alongside this response, the draft regulations are published for the OPRR, on which HMT seeks views by 2 April.

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The UK Prudential Regulation Authority (PRA) has published an updated webpage for banks, building societies and investment firms, notifying it has published an updated Branch Return Excel form and schema to align with changes introduced in PS6/25.This policy statement introduced updates to Supervisory Statement 5/21 (SS5/21) and branch reporting requirements for international firms operating in the UK. The changes are effective from 1 March and so the updated form must be used from reporting reference date 30 June. The PRA has also published a common problems document, as well as an updated version of the Branch Return Q&A, which now includes additional clarifications on completing the whole firm liquidity data section of the return and addressing firms' queries on remote booking. 

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The European Banking Authority (EBA) has published final guidelines on proportionate retail diversification methods under Article 123(1) of the Capital Requirements Regulation (CRR). The guidelines seek to establish a harmonised and more proportionate framework for assessing whether retail portfolios qualify for the preferential 75% risk weight for retail exposures under the standardised approach for credit risk. Under Basel III, a baseline granularity benchmark of 0.2% applies, meaning that retail portfolios are sufficiently granular if no aggregate exposure to a single counterparty or group of connected clients exceeds 0.2% of the overall retail portfolio.

The 2024 consultation presented two alternatives for assessing diversification, and the final guidelines confirm the adoption of the "one-step" approach, on the grounds that it is more proportionate and less burdensome than the iterative method that was also proposed. The consultation originally proposed a diversification threshold of 5%, which has been raised to 10%. This means that institutions may exceed the baseline provided that no more than 10% of the eligible retail portfolio exceeds the 0.2% benchmark. The EBA confirmed that it increased the threshold in its final guidelines to ease the impact on small and medium-sized institutions.

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The European Commission (EC) has launched a consultation and call for evidence on the competitiveness of the EU banking sector under its Savings and Investments Union strategy. The purpose of the consultation and call for evidence is to collect feedback on the EU banking sector's competitiveness and on how the EU's regulatory and supervisory framework can be improved.

The EC explains that persistent regulatory and supervisory fragmentation, including differences in national implementation, the involvement of multiple authorities both at EU and national level, and barriers that constrain an efficient allocation of capital and liquidity across the EU are limiting the competitiveness of EU banks. This presents obstacles to banks operating across borders, resulting in sub-scale business models, higher costs and an uneven playing field compared to global peers. The EC highlights the lack of progress on structural features of the banking union as being regularly identified as one of the main factors holding back banks' competitiveness and further integration of the single market.

The consultation seeks feedback on three main areas: (i) banking competitiveness in the EU and globally; (ii) the single market and the banking union; and (iii) complexity and effectiveness of the regulatory framework.

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The European Banking Authority (EBA) has launched a discussion paper on the simplification and assessment of the credit risk framework. The discussion paper presents preliminary ideas to streamline and improve the usability, efficiency and coherence of the existing credit risk rules, particularly given the significant number of mandates accumulated under the EU Banking Package. The EBA's 2025 report sets out principles to assess and strengthen the simplicity and efficiency of the regulatory and supervisory framework and recommends that the EBA conducts a comprehensive review of both the new flow of mandates (i.e. those not yet issued for consultation) and the existing stock (current products from the Single Rulebook). The discussion paper focuses on credit risk as a priority area given the significant accumulation of mandates and considers how a systematic review of these mandates could be organised, to ensure that the EBA's future work better supports efficiency and simplicity.

The discussion paper explores potential policy simplifications, consolidation of existing regulatory products and greater alignment of key definitions to enhance navigability of credit risk outputs. It also identifies challenges within specific mandates and suggests methodological improvements for future mandated reports under the Capital Requirements Regulation. The deadline for comments is 10 May.