Strengthening Bank Stability through Loss-Absorbing Capacity

Summary

This proposal updates EU rules to ensure banks have enough capital and liabilities to absorb losses during a crisis. It aims to align European standards with global banking requirements to protect taxpayers.
10 03.07.2019
Other
finance
economy
european union
financial institutions and credit

Key points

  • The proposal aligns European banking rules with the international Total Loss-Absorbing Capacity standard for major global banks.
  • New legal definitions are introduced for 'resolution entities' and 'resolution groups' to clarify how banking groups are managed during a crisis.
  • Institutions must meet specific capital and liability targets, with an intermediate target level required by early 2022 and full compliance by the start of 2024.
  • Resolution authorities are granted the power to temporarily suspend certain payment and delivery obligations for up to two working days during a crisis.
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