Domestic
Minister for Finance Michael McGrath launches public consultation on the future of the bank levy
On 11 April 2023, the Minister for Finance Michael McGrath launched a public consultation seeking stakeholder views on the future of the bank levy and consideration whether it should be extended, reformulated, broadened or abolished. Responses to this public consultation will help inform the Department’s analysis. The consultation period will run from Friday 7 April until Friday 5 May 2023.
Central Bank of Ireland publishes research and information on ongoing work to ensure consumers are protected in a changing economic landscape
On 26 April 2023, the Central Bank of Ireland (CBI) published its research findings following phase 1 of the work to ensure regulated firms meet the expectations set in its November 2022 Dear CEO Letter on protecting consumers in a changing economic landscape relating to mortgages secured on a borrower’s primary residence phase 1 of the work, which is now complete, was based on to ensuring that:
- firms are operationally ready to identify and support borrowers who may face challenges meeting their repayments
- where borrowers look to switch there is no discrimination based on where they have their current loan (including in the case of borrowers with non-lending firms)
- interest rate increases are in line with loan terms and conditions, published variable rate policy statements and the regulatory framework for which the CBI is responsible
Having concluded this phase, the CBI is now focused on phase 2 to scrutinise how the framework is delivering for consumers, as rate increases begin to impact.
European
Consultation paper on draft EBA guidelines on the assessment of adequate knowledge and experience of the management or administrative organ of credit servicers, as a whole, under Directive (EU) 2021/2167 (EBA/CP/2023/07)
In accordance with the requirements introduced by the Directive (EU) 2021/2167 (the Non Performing Loans Directive), the European Banking Authority (EBA) is developing guidelines on the assessment of adequate knowledge and experience of the management or administrative organ of credit servicers by credit servicers and competent authorities. The guidelines will apply to competent authorities and credit servicers independent of their governance structures. The EBA has launched a public consultation on its draft guidelines on the assessment of adequate knowledge and experience of the management or administrative organ of credit servicers, as a whole, under the Non-Performing Loans Directive. The guidelines aim at ensuring that the organs are suitable to conduct the business of the credit servicer in a competent and responsible manner. The consultation runs until 19 July 2023. The EBA aims at publishing the final guidelines by the end of 2023.
EBA identifies fraud in retail payments and over indebtedness as key issues affecting consumers
The EBA published its 8th edition of its Consumer Trends Report for 2022/23, which summarises trends observed for the products and services under the EBA’s consumer protection mandate. Two issues facing consumers in the EU which appear in the report include fraud in retail payments and over-indebtedness and arrears. These issues will help shape the EBA’s consumer protection priorities over the next two years. The report outlines that mortgage credit was affected by rising inflation and the normalisation of interest rates, while credit products were impacted by poor creditworthiness assessments and the rise of new and unregulated credit products. These issues have been identified as key drivers for consumers’ repayment difficulties and, ultimately, over-indebtedness. Fraud in retail payments, mainly perpetrated by new and different techniques implemented by fraudsters, was the other identified issue as experienced by consumers.
Commission Delegated Regulation (EU) 2023/827 of 11 October 2022 laying down regulatory technical standards amending Delegated Regulation (EU) No 241/2014 as regards the prior permission to reduce own funds and the requirements related to eligible liabilities instruments
On 19 April 2023 the Official Journal of the European Union (OJ) published Commission Delegated Regulation (EU) 2023/827 of 11 October 2022 laying down regulatory technical standards amending Delegated Regulation (EU) No 241/2014 as regards the prior permission to reduce own funds and the requirements related to eligible liabilities instruments. The Delegated Regulation enters into force on the twentieth day following its publication in the OJ.
ECB and SRB welcome European Commission’s legislative proposals for bank crisis management and deposit insurance framework
The European Central Bank (ECB) and the Single Resolution Board (SRB) welcome the European Commission’s proposed legislative changes to the European bank crisis management and deposit insurance framework. The bank crisis management and deposit insurance framework has been defined through amendments to three legislative texts: the Bank Recovery and Resolution Directive, the Single Resolution Mechanism Regulation and the Deposit Guarantee Schemes Directive.
Proposed amendments the Bank Recovery and Resolution Directive
On 18 April 2023, the EU Commission has adopted a proposal to amend and further strengthen the existing EU framework for bank crisis management and deposit insurance (CMDI), thereby intending to take a further step towards the completion of the Banking Union. The proposed package includes amendments to the following:
- Bank Recovery and Resolution Directive 2014/59/EU (BRRD) which sets out the powers, rules and procedures for the recovery and resolution of banks, including cross-border cooperation arrangements to deal with cross-border bank failures.
- SRM Regulation (EU) No 806/2014 (SRMR) mainly refers to the BRRD in terms of resolution triggers and resolution tools, the amendments on the SRMR logically follow the changes in the BRRD.
- Deposit Guarantee Schemes Directive 2014/49/EU (DGSD) proposals suggest that branches of credit institutions established in third countries will be covered by the DGSD if they want to provide banking services and take eligible deposits in the EU under the condition that they join a DGS within a Member State.
Consultation paper – guidelines on the STS criteria for on-balance-sheet securitisation under Article 26a(2) of Regulation (EU) 2017/2402 of the European Parliament and the Council (EBA/CP/2023/09)
The EBA has published guidelines for a three month public consultation until 7 July 2023. The proposed guidelines have been developed to provide guidance on the harmonised interpretation and application of the criteria on simplicity, standardisation, transparency and specific requirements concerning the credit protection agreement, the third-party verification agent and the synthetic excess spread, applicable to STS on-balance-sheet securitisation, as set out in Articles 26b to 26e of Regulation (EU) 2017/2402.
The main objective of the guidelines is to provide a single point of consistent interpretation of those criteria and ensure a common understanding of them by the originators, original lenders, securitisation special purpose entities (SSPEs), investors, competent authorities and third party verification agents verifying STS compliance in accordance with Article 28 of Regulation (EU) 2017/2402, throughout the Union. The guidelines will be applied on a cross-sectoral basis throughout the EU with the aim of facilitating the adoption of the criteria, which is one of the prerequisites for the application of a more risk-sensitive regulatory treatment of exposures to securitisations compliant with such criteria, under the EU securitisation framework for institutions updated by the capital markets recovery package in 2021.
