The European Banking Authority (EBA) has published a final report with draft implementing technical standards (ITS) on the implementation of international financial reporting standard (IFRS) 18 in supervisory financial reporting (FINREP) under the Capital Requirements Regulation (CRR). IFRS 18, which replaces International Accounting Standard (IAS) 1 and applies from 1 January 2027, introduces a new structure for statements of profit or loss. The final report sets out the amendments required to align FINREP with IFRS 18, including amended versions of the relevant reporting templates which can be found in the press release.

The EBA also published an opinion providing guidance on how institutions can report profit or loss information during the interim period between the first application date of IFRS 18 and the first application date of the amending ITS on the supervisory FINREP (which is currently under consultation until 10 July). While institutions must apply IFRS 18 in their public financial statements from 1 January 2027, the amended FINREP ITS incorporating IFRS 18 are expected to apply from the end of September 2027. To bridge this gap, the EBA advises competent authorities to allow institutions to use a set of IFRS 18-aligned FINREP templates on a voluntary basis during the interim period, thereby avoiding the operational burden of maintaining two different profit or loss reporting frameworks.

The data point model and the XBRL taxonomy based on the revised templates for the implementation of IFRS 18 will be published by the end of July, or at the latest at the beginning of September. The final report will be merged with the final report on the supervisory FINREP, which the EBA expects to submit to the European Commission by the end of the year.

The Bank of England's (BoE) Financial Policy Committee (FPC) has published its July financial stability report alongside the record of its 26 June meeting. The FPC meets to identify risks to financial stability and agree policy actions aimed at safeguarding the resilience of the UK financial system.

Key topics covered include:

• Markets: Vulnerabilities in risky asset valuations, sovereign debt markets and risky credit markets, including private credit, remain and some have become more pronounced since the December 2025 financial stability report. Notably, there has been a substantial increase in the use of leverage in equity markets.
• AI-related risks: The FPC examined the macro financial risks arising from the AI transition across a range of sectors. It also notes that recent rapid advances in frontier AI capabilities have increased financial stability risks related to cyber and operational resilience.
• Countercyclical capital buffer (CCyB): The FPC maintained the UK CCyB rate at its neutral setting of 2%.
• Private markets: The FPC welcomed the BoE's publication of the stress scenario for the private markets system wide explanatory scenario (SWES). The FPC expects to use the SWES to improve its understanding of how banks and non-banks active in private markets would respond to a severe but plausible global downturn.
• Bank capital reform: Following its review of bank capital requirements, the FPC announced that it will work with the UK Prudential Regulation Authority (PRA) to modernise the capital framework. The proposed reforms aim to improve the usability of capital buffers and make leverage ratio requirements more proportionate and effective while maintaining overall financial system resilience. 
• Stablecoins and money market funds (MMFs): The FPC welcomed the BoE's policy statement and consultation on the draft code of practice for systemic sterling-denominated stablecoins and recent statements by HM Treasury and the UK Financial Conduct Authority on their plans to strengthen the resilience of MMFs.

Commission Delegated Regulation (EU) 2026/807 amending the regulatory technical standards (RTS) set out in Delegated Regulation (EU) 2023/206 was published in the Official Journal of the European Union (OJ). 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). It was initially adopted on 10 March, and we cover the amendments it made on our blog here. The Amending Regulation is based on final draft RTS developed by the European Banking Authority and published in December 2025. It will enter into force on 28 June, being the 20th day following publication in the OJ.

The European Banking Authority (EBA) has published its final report on the guidelines on the authorisation of third-country branches (TCBs) under Article 48c(8) of the Capital Requirements Directive (CRD), as amended by CRD VI (Directive (EU) 2024/1619). Following the November 2025 consultation, no changes have been made by the EBA.

The guidelines set out: (i) the list of information to be included in the application, concerning matters such as the business plan, capital endowment, liquidity, internal governance, booking arrangement and reporting requirements and information about head undertaking(s), in particular their compliance with prudential requirements and a reasoned, third party legal opinion stating that there is no obstacle for the applicant head undertaking to comply with EU and national law, in as much as applicable, in relation to the TCB.; (ii) the procedure for authorisation, as well as standard forms and templates for the provision of the information required; (iii) the conditions for granting authorisation; and (iv) the conditions under which competent authorities may rely on information that has already been provided in the process of any prior third-country branch authorisation. The guidelines will be translated into the official EU languages and published on the EBA website. Competent authorities will have two months from the publication of the translations to report on whether they comply, intend to comply or reasons for non-compliance. The guidelines will apply from 11 January 2027.

The Bank of England's Financial Policy Committee (FPC) has published a financial stability in focus report proposing reforms to modernise the UK bank capital framework to make it simpler, more effective, proportionate and better calibrated to current risks while maintaining financial resilience. The package aims to address unintended consequences in the leverage framework and strengthen the releasability and usability of buffers.

The FPC reaffirms its assessment from its December 2025 report that an appropriate benchmark for system wide Tier 1 capital requirements remains around 13% of risk weighted assets (equivalent to a Common Equity Tier 1 ratio of around 11%). Since December, the FPC, working with the UK Prudential Regulation Authority (PRA), has progressed its analysis of buffer usability and the leverage ratio, and is announcing a package of reforms informed by the feedback it has received. In this report, the FPC sets out its longer term vision for a simpler capital buffer framework centred on a single buffer that is releasable in stress and can be used without automatic distribution restrictions. As an initial step, the FPC welcomes the PRA statement with its decision to make the other systemically important institution buffers releasable in the event of systemic stress. We cover the PRA's statement in a separate update.

In addition, the FPC and PRA intend to consult on reforms to the leverage ratio framework, including: (i) removing the countercyclical leverage buffer; (ii) increasing the additional leverage ratio buffer for firms with systemic buffers to 50% of corresponding risk weighted systemic buffers in line with international standards; and (iii) reducing the minimum leverage ratio requirement from 3.25% to 3%, and applying a simple general leverage ratio buffer set at 25 basis points for firms subject to leverage requirements. The FPC and PRA will further assess the impact of these proposals on financial stability and market functioning at the Q3 FPC meeting. Separately, the FPC expects to update its assessment of the interaction of capital requirements related to domestic exposures in its Q4 2026 financial stability report.

The UK Prudential Regulation Authority (PRA) has published a statement clarifying that it may release other systemically important institution (O‑SII) buffers during periods of systemic stress. Consistent with the Bank of England's Financial Policy Committee's vision to modernise the bank capital framework, and as a near-step in support of that vision, the PRA intends to do so by exercising its existing powers to vary O‑SII buffer rates. This includes reducing them to zero under the Capital Buffers and Macro-prudential Measures Regulations 2025 while engaging with the FPC. The PRA explains that releasing O‑SII buffers would lower the capital threshold at which automatic distribution restrictions apply in stress, which in its view will support banks' ability to absorb losses rather than taking defensive actions such as reducing lending.

The PRA states that, following any release of the O-SII buffer, it would provide an indicative period during which no increase in O‑SII buffer rates would be expected, and that any subsequent rebuild would be phased over a period consistent with banks' ability to restore capital while continuing to lend to creditworthy UK households and businesses.

The PRA intends to consult later this year on proposed changes to its statement of policy on the approach to implementation of the O-SII buffer and related aspects of its approach to varying O-SII buffer rates in the event of systemic stress. This will include further guidance on rebuild expectations. The PRA will also consider whether greater clarity on the use of the PRA buffer outside periods of systemic stress, together with further engagement with investors and rating agencies, could improve the usability and understanding of regulatory capital buffers.

The draft Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026 was published and laid before Parliament, alongside an explanatory memorandum. The draft Order amends the Building Societies Act 1986 (BSA 1986) to align the provisions on common seals and the execution of documents by building societies with the equivalent regime under the Companies Act 2006. Building societies will therefore be able to choose whether to execute documents using a common seal or through authorised signatories, bringing them into line with the more flexible arrangements available to companies.

In addition, under section 7 of the BSA 1986, subject to specific exemptions, at least 50% of a building society's liabilities must be shares owned by individuals (known as "the funding limit"). The draft Order makes provisions to exclude certain sources of funding for the purposes of calculating the funding limit. This includes: liquidity facilities which form part of the BoE's sterling monetary framework; debt instruments issued by building societies to meet BoE's Minimum Requirements for Own Funds and Eligible Liabilities (MREL); and sale and repurchase agreements entered into by building societies using High Quality Liquid Assets held to meet the UK Prudential Regulation Authority's Liquidity Coverage Requirement.

These changes are intended to ensure building societies are not discouraged from practices which support prudent management of liquidity, and that instruments issued to meet MREL requirements are treated appropriately with other excluded regulatory capital instruments. The Order is expected to come into force on 1 January 2027.

The European Banking Authority (EBA) has published a report with the results of a targeted peer review assessing how competent authorities supervise compliance with the Capital Requirements Regulation and Bank Recovery and Resolution Directive Pillar 3 disclosure requirements between June 2023 and June 2025. The EBA found that most authorities had fully or largely integrated Pillar 3 requirements into their supervisory frameworks, with supervisory practices generally operating efficiently and demonstrating a high degree of convergence across the EU. However, the review identified some inconsistencies between jurisdictions, including one authority rated as only partially compliant and another receiving largely "not applied" ratings due to the absence of formal assessment methodologies and processes. The EBA sets out specific individual follow-up measures where deficiencies had been identified, as well as best practices for improvement.

The draft Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026 were published, accompanied by a draft explanatory memorandum. The Regulations support the transition to the FSMA 2000 model of regulation, under which detailed prudential requirements are set by the UK Prudential Regulation Authority within a framework established by government and Parliament. This transition entails the revocation of provisions of the UK Capital Requirements Regulation (UK CRR) and restatements, as needed, in UK legislation to facilitate the FSMA model, with UK CRR provisions replaced with regulator rules, supervisory statements and statements of policy.

The Regulations restate existing UK CRR equivalence provisions in legislation to create a single overseas prudential requirements regime (OPRR), preserving the scope and effect of the current prudential equivalence framework and treating existing equivalence decisions as designations under the new regime. The OPRR enables HM Treasury to designate overseas jurisdictions for specified prudential purposes, with future designations requiring a further statutory instrument and parliamentary approval. In particular, the Regulations provide a framework for designation in the context of: (i) exposures to overseas credit institutions, investment firms and exchanges; (ii) overseas eligible covered bonds; (iii) exposures to overseas central banks, regional governments, local authorities and public sector entities (with specific provision made for those in Gibraltar); and (iv) issuance of capital by overseas intermediate financial holding companies.

The Regulations are expected to enter into force on 1 January 2027.

The European Banking Authority (EBA) has published its 2025 report on supervisory convergence highlighting ongoing progress in aligning supervisory practices across the EU. The report forms part of the EBA's mandate under its Founding Regulation to enhance supervisory convergence across the internal market, and covers prudential supervision, resolution, consumer protection, digital finance and anti-money laundering and countering the financing of terrorism (AML/CTF) supervision. While progress was made in 2025, the EBA identified a number of gaps and challenges, particularly through its European Supervisory Examination Programme.

In prudential supervision, although institutions progressed in transitioning to Basel III under the Capital Requirements Regulation (CRR3), challenges remain in data quality and interpretation of new requirements. Separately, divergences were identified in P2R, particularly for concentration and interest rate risks, while P2G methodologies showed improving alignment yet remained uneven across jurisdictions.

In digital operational resilience, gaps persist in third party risk governance and automation of controls.

In resolution, challenges continue in the operational ability to deliver valuation data within short timelines, documentation completeness, governance and data-quality assurance, as well as the operationalisation and mobilisation of liquidity and collateral.

The report also highlights ongoing weaknesses in AML/CTF supervision and coordination, risks arising under MiCAR and gaps in the integration of ESG risks into supervisory frameworks.

Looking ahead, the EBA will focus on implementing Basel III reforms, advancing resolution testing frameworks, and strengthening supervision under DORA and MiCAR.

The European Banking Authority (EBA) has published its final revised guidelines for the supervisory review and evaluation process (SREP) and supervisory stress testing, mandated under the Capital Requirements Directive (CRD). The SREP is the core supervisory process that consolidates findings from all supervisory activities into a comprehensive assessment of an institution. Following consultation, the guidelines consolidate all relevant SREP provisions into a single, comprehensive framework as part of the EBA's efforts to simplify and enhance the EU supervisory framework. The update integrates new elements, including environmental, social and governance factors, operational resilience, third-country branches and clarifications on the interaction between the revised Pillar 1 and Pillar 2 capital requirements, including the output floor.

The guidelines also align with the interest rate risks for the banking book and credit spread risk arising from non-trading book activities package and incorporate ICT risk assessment into the main SREP framework. Other updates include improved proportionality, sequencing, and supervisory effectiveness, with a clearer link between supervisory measures and assessment areas. The revised guidelines will replace the existing SREP Guidelines and the Guidelines on ICT risk assessment under the SREP, with application from 1 January 2027. They will be translated into all the official EU languages and published on the EBA website. The deadline for competent authorities to report whether they comply with the guidelines will be two months after the publication of the translations.

The Financial Services and Markets Act 2023 (Commencement No. 15 and Saving and Transitional Provisions) Regulations 2026 were made and published. The Regulations form part of the phased implementation of the Financial Services and Markets Act 2023 (FSMA 2023) with respect to the revocation of assimilated law (the body of EU law retained at the point of Brexit).

In particular, from 1 January 2027, the Regulations revoke Articles 81(1)(a)(iii), 82(a)(iii), 107(3) and (4), 114(7), 115(4), 116(5), 382(4)(b), 391 and 497 of the Capital Requirements Regulation (Regulation 575/2013) (CRR), that relate to existing equivalence regimes which are being replaced by the new UK overseas prudential requirements regime. Related legislation, specifically Regulation 11(5)(e) of the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 and Implementing Decision 2014/908, which contains equivalence decisions relating to Articles 107(4), 114(7), 115(4), 116(5) and 142(2) of the UK CRR are also being revoked. The Regulations also amend earlier commencement regulations to remove the CRR Equivalence Directions 2020 from an existing saving provision and introduce saving and transitional provisions to preserve the treatment of central counterparties (CCPs) as qualifying CCPs (QCCPs) under Article 497 the CRR. This is to ensure continuity of treatment for recognised CCPs and those seeking recognition under the European Market Infrastructure Regulation, during the transition to the new regime.

The Bank of England (BoE) has published a final policy statement setting out its regulatory framework for sterling-denominated systemic stablecoins, alongside a consultation on the draft code of practice for issuers. This follows the November 2025 consultation.

Under the regime, which will be established through amendments made by the Financial Services and Markets Act 2023 to the Banking Act 2009, the UK Financial Conduct Authority (FCA) will regulate the issuance, custody and admission to trading of UK-issued qualifying stablecoins and, in due course, their use in payments, while systemic stablecoins recognised by HM Treasury will be regulated jointly by the BoE and the FCA.

Following consultation feedback, the BoE has made several changes to the final policy. Key changes include:

• Revising the backing asset composition from a 60/40 to a 70/30 split between short‑term UK government debt and unremunerated central bank deposits (overnight repo and reverse repo transactions using eligible government securities with a residual maturity of six months will be permitted).
• Replacing proposed holding limits with a temporary GBP40 billion issuance "guardrail", which the BoE considers significantly less complex to implement.

Read more.

The European Banking Authority (EBA) has published its final report with draft implementing technical standards (ITS) amending the Pillar 3 disclosure framework to finalise the implementation of the disclosure requirements introduced under the revised Capital Requirements Regulation (CRR3). This follows the May 2025 consultation. The ITS revise disclosures on environmental, social and governance (ESG)-related risks and introduce new requirements on equity exposures and aggregate exposures to shadow banking entities. The intention is to improve clarity, consistency and usability within the EU's broader simplification agenda. The final draft ITS are closely linked to the ESG supervisory reporting framework set out in the related consultation paper and are advised to be read together.

In relation to ESG disclosures, and in line with the CRR3 mandate, the ITS extend the scope of application beyond large listed institutions to include large non-listed institutions, other institutions, small and non-complex institutions (SNCIs) and large subsidiaries. The framework introduces a more proportionate and streamlined approach, with differentiated disclosure requirements based on institutions size and complexity. In particular, SNCIs are required to disclose only essential information (including on physical and transition risks and exposures to fossil fuel sectors), while the requirements for larger institutions are clarified and streamlined rather than expanded.

The ITS also take into account existing supervisory guidance and seek to enhance consistency across frameworks, including through alignment of terminology and instructions which can be found in the press-release.

The draft ITS will be submitted to the European Commission for adoption. They are expected to apply from a reference date of 31 December 2026, with a later application date of 31 December 2027 for SNCIs. The instructions to the templates will not be published in the Official Journal, but will be published on the EBA website, and disclosures should be provided in accordance with those instructions. They will be available in all languages and shall remain directly applicable in all Member States as part of the ITS.

The UK Prudential Regulation Authority (PRA) has published consultation paper CP9/26, setting out proposed adjustments to the Basel 3.1 internal model approach (IMA) for market risk. The Basel 3.1 standards introduce a comprehensive set of amendments to the market risk framework, commonly referred to as the fundamental review of the trading book (FRTB), with implementation deferred to 1 January 2028. As part of its ongoing monitoring of FRTB implementation, the PRA has identified several areas where targeted adjustments could improve the proportionality and operational effectiveness of the framework, while maintaining robust prudential standards.

Key proposals include:

• Extending the profit and loss attribution test monitoring period from one year to three years.
• Adjusting elements of the risk factor eligibility test (RFET).
• Introducing targeted adjustments and operational simplifications to the non modellable risk factors framework, a new feature of the Basel standards linked to the RFET.
• Reducing barriers to gradual IMA approval by adjusting calculations for firms who use a mix of the IMA and standardised approaches, preventing a scenario where capital requirements could rise as firms move gradually on to IMA.
• Implementing operational simplifications to the treatment of collective investment undertakings.
• Making other minor adjustments and clarifications to the IMA framework.
• Updating reporting and disclosure requirements to align with the proposals above.

The deadline for responses is 18 September. The PRA proposes that the implementation date for the IMA, including the changes resulting from this consultation, will remain 1 January 2028. No other changes are being proposed and all other rules come into force in January 2027, as previously planned.

The Bank of England (BoE) has announced the scenario phase of its second system wide exploratory scenario (SWES), this time focused on private markets. The BoE has issued participants with a hypothetical stress scenario that details a severe, but plausible, global macro-economic recession over a five-year period. The severity of this shock has been calibrated to represent a tail-risk outcome for the global economy and is broadly consistent with the severity of other stress tests run, such as the bank capital stress test. The exercise aims to assess whether vulnerabilities in private markets could have systemic implications and under what conditions. Conducted in two rounds, participants will model the impact of the scenario and their behavioural responses.

The exercise will examine vulnerabilities including leverage, valuation opacity, liquidity pressures, interconnectedness and deteriorating credit quality, as well as systemic transmission channels through which stress could spread to markets, institutions and the real economy. Following round 1, the BoE will provide aggregated feedback, allowing firms to update their responses. Initial findings will be published in the July Financial Stability Report, with interim results expected later in the year and a final report expected in 2027. A new webpage detailing the hypothetical scenarios to be used in the SWES was published on the same day.

The European Banking Authority (EBA) has published a report proposing targeted simplifications to the EU bank capital framework, following a holistic review of the microprudential, macroprudential and resolution capital regime in the EU ("stacking order"). The report forms part of the EBA's broader priority of simplifying and enhancing the efficiency of the regulatory and supervisory framework under its 2026 work programme and follows its earlier report in October 2025 on the efficiency of the regulatory and supervisory framework.

The EBA does not advocate a fundamental redesign but instead recommends potential adjustments to reduce complexity and improve consistency, predictability and effectiveness while preserving the acquired resilience of the European banking system. Recommendations in the report follow four guiding principles: preserving overall resilience and capital neutrality; adhering to international standards; ensuring proportionality; and enhancing the efficiency and depth of the Single Market.

Key recommendations include:

• Microprudential stack. Preserving most elements of the current microprudential toolkit, including Pillar 1, Pillar 2 requirements and Pillar 2 guidance while clarifying and strengthening their respective roles. The report also recommends streamlining the leverage ratio stack by converting its Pillar 2 requirement into a buffer and removing its Pillar 2 guidance. In addition, the EBA suggests removing macroprudential considerations from the microprudential stack.

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The European Banking Authority (EBA) has launched a consultation on the methodology, templates and template guidance for the 2027 EU wide stress test, assessing the resilience of EU banks and the wider banking system. The exercise introduces significant simplifications to improve efficiency and risk sensitivity, while preserving the robustness and comparability of results. Key changes include a substantial reduction in data requirements and closer alignment of information with harmonised supervisory reporting. For the first time, the exercise will also integrate both transition and physical climate risk assessments. The consultation has been launched earlier than in previous cycles to support banks’ preparedness and the EBA also plans to hold a series of workshops for further guidance. The results of the stress test will continue to inform the Supervisory Review and Evaluation Process.

The European Banking Authority (EBA) has published a discussion paper on extending its Pillar 3 data hub to small and non-complex institutions (SNCIs). The hub provides public access to prudential information from all European Economic Area credit institutions in a single location. It was launched in January for large and other institutions and the EBA is now progressing its extension to SNCIs. For these institutions, the EBA is mandated to prepare and publish the Pillar 3 disclosures based on supervisory reporting data submitted to competent authorities. The discussion paper proposes a simplified process detailing the methodology for calculating Pillar 3 disclosures. It also outlines the next steps and the expected timeline for the first publication. The deadline for feedback is 20 July and a public hearing is scheduled for 1 July. Responses will inform the finalisation of the SNCI process and the calculation methodology.

The European Commission (EC) has adopted a Delegated Regulation 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 Delegated Regulation sets out amendments 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. It reflects feedback from the November 2025 consultation and the most recent April consultation, as well as input from member state experts. The Delegated Regulation will now be reviewed by the European Parliament and the Council of the EU, with a three-month scrutiny period (extendable by a further three months). If no objection is raised, the measures will enter into application on 1 January 2027, for a period of three years. The EC has published Q&As alongside the adopted Delegated Regulation.

The UK Prudential Regulation Authority (PRA) has published a policy statement (PS15/26) on phase 1 of its Pillar 2A review. The policy statement provides feedback on the PRA's previous May 2025 consultation paper (CP12/25). In addition, having considered the responses to CP12/25, the PRA has made changes to the draft policy materials to provide greater detail and increase clarity where relevant, including:

• Excluding exposure to SMEs from the systematic methodology for unconditionally cancellable commitments in the retail exposure class.
• Removing exposures secured by collateral recognised through the Financial Collateral Simple Method (FCSM) from the scope of the systematic methodology.
• Providing greater flexibility in how firms are expected to assess their idiosyncratic credit risks, compared to the consultation proposal to introduce expectations for firms to use credit scenarios.
• Clarificatory updates to improve transparency and guidance for all firms, and changes to the small domestic deposit takers (SDDT) policy materials to align the operational risk Pillar 2A methodology for SDDTs and non-SDDTs.

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The European Commission (EC) has adopted a Delegated Regulation regarding regulatory technical standards (RTS) specifying operational risk requirements under the Capital Requirements Regulation (CRR), as amended by the CRR3. The Delegated Regulation is based on draft RTS submitted by the European Banking Authority (EBA) and specifies key aspects of the operational risk framework. The RTS, amongst others:

• Business indicator components—specify the components of the business indicator by setting out a list of items and the elements to be excluded from the business indicator.
• Mergers, acquisitions and disposals—set out how institutions are to determine adjustments to the business indicator and their loss data set following mergers, acquisitions and disposals. In the case of disposals, they specify the conditions under which competent authorities may grant permission to exclude amounts related to disposed entities or activities from the business indicator, and the timing of such adjustments.

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The UK prudential regulation authority (PRA) has published a policy statement providing feedback on the PRA's July 2025 consultation paper CP19/25 on the restatement of UK Capital Requirements Regulation (CRR) definitions in the PRA Rulebook, along with its final policy. Following respondent feedback, the PRA is making the following changes to the draft policy it consulted on:

• Consistent italicisation of embedded CRR terms in the PRA Rulebook Glossary definitions and cross-references to legislative definitions throughout.
• Change to the "branch" definition in the PRA Rulebook Glossary to better align its wording with the CRR definition.
• Additional wording in Article 229(3) of the Credit Risk Mitigation (CRR) Part to specify the meaning of "market value" in that context.
• Change to the "recognised exchange" definition to reflect the policy position confirmed in PS6/26—Recognised exchanges policy and transfer of main indices.

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The UK Prudential Regulation Authority (PRA) has issued a Dear CEO letter setting out updated expectations on the prudential treatment of tokenised assets, stablecoins and other cryptoasset exposures. This replaces the 2022 guidance which set out interim expectations when cryptoasset markets were less developed and international standards were still under development.

The PRA reaffirms that firms should apply the full prudential framework to cryptoasset exposures, including the Fundamental Rules, Pillar 1 and Pillar 2 requirements, and the Internal Capital Adequacy Assessment Process. It emphasises the need to maintain strong governance and risk management, including by carefully assessing whether the characteristics of these assets are sufficiently captured within existing frameworks.

It confirms that a conservative capital treatment remains appropriate for most cryptoassets, including a 100% capital requirement for unbacked cryptoassets, while recognising that certain newer forms of cryptoassets may warrant a more risk-sensitive approach. The PRA also clarifies that tokenised traditional assets should generally receive the same prudential treatment as their non-tokenised equivalents where legal rights and underlying risks are comparable, in line with a "same risk, same regulatory outcome" principle.

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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.